What are Registration Loans?
If you don’t own your car outright, you can still apply for a loan using its registration. Upon paying any important taxes and clearing the fees of a car in your state, you can apply to get that car registered in your name and receive a document with that evidence.
Keep in mind that titles and registrations are different. Registrations need to be updated continuously but titles only change when the owner of the car changes or if you’ve paid off a car loan.
With registration loans, you can borrow money from lenders and upon approval, you can continue driving your car as usual until the amount loaned has been paid off according to the lender’s criteria. The amount you receive will be based on your income and the most recent value of your vehicle.
Difference between a Car Title Loan and Registration Loan
Although they may look similar in nature, there are some discerning features of the two that separate them into different classes:
Car title loans are for car owners
One must possess a vehicle exclusively and must have paid off all installments if there are any left on said vehicle. If you still owe money on your car or if you don’t own a car at all, then this option isn’t available for you.
Car title loans allow for the withdrawal of larger amounts
Car title loans have a higher upper threshold for borrowing money as compared to vehicle registration loans. The approval range is between 25 to 50 percent of your car’s current value.
Registration loans carry higher interest rates
Not using your car as collateral and using your registration instead comes with heavy risk. With this risk comes the add-on of higher interest rates which can usually cost you hundreds or even thousands of extra dollars as interest.
How Can I Find Registration Loans Near Me?
Through WeLoans, you can find registration loan lenders willing to loan you your specified amount. It is vital to have your registration with you at the time of application. If you haven’t registered your vehicle with your state, it should be done on a priority basis. To register, you must have:
A title in your name
The vehicle must be titled in your name when you take it to get registered.
Passed the emission/smog test and safety inspection
The vehicle must go through and clear the emissions and smog check by the registration authority. Further, it should also pass the safety inspection conducted on it by the specialists.
Possess an authentic and valid car insurance
Your vehicle must be ensured by any third-party insurance company to be able to get registered.
Keep in mind that registration loan funding is only available in the U.S. state of Arizona.
How Does WeLoans Compare?
|Why Use Us?|
|How much am I allowed to borrow?||Up to $35,000||No hidden fees or charges|
|What are typically the loan terms?||Up to 36 months||Various repayment options|
|Do lenders check my credit?||Yes||Soft search only|
|Do lenders take bad credit?||Yes||Bad credit considered|
|Chances of approval||Good||Quick turnaround|
|How to apply?||Apply online||No paperwork needed|
Advantages & Disadvantages of Registration Loans
As mentioned, registration loans and car title loans are different from each other. One has benefits over the other and according to the customer’s situation, one can prove to be a better option over the other.
Advantages of registration loans
You do NOT have to own a car
A registration loan only requires that you own the vehicle’s registration and have it with you in hand. You are eligible to apply for a registration loan as long as you possess an authentic registration of the vehicle in question.
No repossession risks
If for some unfortunate reason, you default on a registration loan, the lender cannot claim possession of your car.
Disadvantages of registration loans
Higher interest rates
Since you’re not providing your car as collateral for the loan, the interest rates are generally higher leading to hundreds of dollars as an increase in your amount to pay off.
Lower lending amounts
The borrowing limit on registration loans is generally lower than title loans for the same reason of not using your car as collateral.
The lender may not be able to repossess your car if you default, but they may send your account to collections or sue you for the remaining balance.
How Much Does a Registration Loan Cost?
You can borrow from $400 to $5000 as an amount for a registration loan. This amount can vary, and the varying factors are the borrower’s income, the current value of the vehicle registered being used in the deal, and the personal requirement of the borrower.
The cost will depend on the amount that you choose to borrow along with the loan term, i.e., the duration that you want to take the loan out for. You can use a title loan calculator to estimate the cost of your registration loan cost.
Arizona state statutes have fixed the monthly rates of interest for these loans. For loans that are over $500, the rate is 15%, 180% APR and for loans that are lower than $500, the rate is 17%, 205% APR.