Can I Get a Title Loan if the Title Is Just Signed Over to Me?

A title loan is a secured loan where a borrower uses their vehicle’s clear title as collateral. If a vehicle title has been signed over to you but not yet officially transferred into your name, this presents a hurdle for securing a title loan. Lenders require the title to be registered in your name before a loan can be processed. This article explains the necessary steps to transfer the title and successfully apply for a title loan.

Understanding Title Ownership for Loans

For a title loan, legal ownership, reflected by the title being officially registered in the applicant’s name, is a requirement. Lenders need a clear, lien-free title to secure the loan. A lien-free title indicates the vehicle is fully paid off and has no outstanding loans or financial claims against it. A signed-over title, while demonstrating intent of ownership transfer, does not constitute legal, registered ownership for loan collateral purposes. Until the title is formally transferred, the vehicle’s ownership remains with the previous registered owner in official records.

Process for Transferring Vehicle Title

The first step toward securing a title loan with a signed-over title involves officially transferring the vehicle title into your name. This process is typically handled by your state’s Department of Motor Vehicles (DMV) or an equivalent state agency. Timely action is important, as many states impose penalties for late title transfers, often within 10 to 30 days of purchase.

To initiate the transfer, you will generally need the signed-over title from the previous owner, which should include their signature and potentially an odometer disclosure for vehicles under a certain age. A bill of sale is often required, detailing the vehicle, purchase date, and price, and it should be signed by both the buyer and seller. You will also need a valid government-issued photo identification and proof of residency.

Most states require a specific application form for title transfer, which you will need to complete accurately. This form typically asks for vehicle details, your personal information, and the odometer reading. Depending on your state, you might also need proof of current vehicle insurance and sometimes a vehicle inspection certificate, especially for older vehicles or those brought in from another state.

Associated fees for title transfer vary, but you can expect to pay a title transfer fee ranging from approximately $15 to $85. Sales tax on the purchase price of the vehicle will also be due, along with new registration fees if you are registering the vehicle simultaneously. These fees are generally the responsibility of the buyer and must be paid at the time of transfer.

Securing a Title Loan

After the vehicle title has been successfully transferred and registered in your name, you can proceed with the title loan application. This begins with identifying a lender, either online or by visiting a physical loan office.

For the loan application, you will need several documents to verify your identity, income, and vehicle ownership. These commonly include a valid government-issued photo identification, proof of income such as recent pay stubs or bank statements, and proof of residency like a utility bill.

Lenders will conduct a vehicle appraisal to determine its market value, which directly influences the loan amount you can receive. This appraisal may involve submitting photos of the vehicle or an in-person inspection. Title loan amounts commonly range from 25% to 50% of the vehicle’s appraised value.

Repayment terms for title loans are generally short, often ranging from 15 to 30 days, though some lenders offer longer installment plans. These loans are characterized by high annual percentage rates (APRs), which can frequently exceed 300%. The loan agreement will outline the repayment schedule and any associated fees. It is important to understand these terms fully before committing to the loan.