Title Loans: What You Need to Know

We understand that life can throw unexpected financial curveballs your way. When you’re in a pinch and need a hand, you might consider a title loan as a potential solution. how they work, and the alternatives available to you.

What Are Title Loans?

Title loans, also known as Title Cash Out loans or car title loans, are loans that use your vehicle and its equity as collateral. If you own a car, truck, or motorcycle and have a clear and clean title (meaning you don’t owe money on it), you can use that title to secure a loan. These loans are typically offered by many financial institutions and can be a viable and quick alternative for receiving funds.

How Do Title Loans Work?

Here’s a simple breakdown of how title loans operate:

Application: You can apply for a title loan by providing your vehicle’s title, registration, current mileage, proof of identity, and sometimes proof of income.
Assessment: We’ll assess the NADA (National Automobile Dealers Association) valuation of your vehicle and determine the loan amount you’re eligible for. Lenders could offer you up to 100% of your car’s value. Extended Loan to Value (LTV%), can have an effect on the interest rate offered.
Terms: Title loans can vary in terms (12-84 months) and can be a lower percentage rate compared to unsecured or variable rate loans. Title loans will have a 30-day pay cycle. Extended terms can have an effect on the interest rate offered.
Collateral: A good rule of thumb for title loans is to keep the collateral within 10 years at the time of underwriting. Consideration of the collateral being reviewed can vary given the specifics of the said collateral. Increased ages on collateral, can have an effect on the interest rate offered.
Costs: Title loans come with locked and generally lower interest rates (compared to personal loans and credit cards) and minimal fees. Which can make it an advantageous lending alternative for borrowers and lenders alike.

Consider Riskier Alternatives

Rather than exploring the title loan options, there are riskier alternatives:

Personal Loans: Can come with a higher interest rate and can also incur additional fees. Both of these can push up the monthly payments and demands on monthly income/finances.
Emergency Funds: Many borrowers consider using emergency funds to avoid immediate financial crises. However, exhausting savings, IRAs, 401K’s can come with monetary penalties and could present financial risks later in life.
Community Resources: Explore local community resources and nonprofit organizations that may provide assistance during tough times. Our partner, GreenPath, has a variety of programs you may be able to take advantage of. At Zing, we offer one-on-one financial coaching sessions, if interested, please request an appointment.

Title loans are a quick and safer alternative to riskier variable and high-interest rate options, offered by specialized lenders. At Zing Credit Union, we encourage you to explore our Title Loan alternatives to meet your financial needs. We’re here to help you with all consumer loan options and financial guidance to ensure you make the best choices for your financial well-being. Remember, it’s always best to plan, build an emergency fund, and seek out alternatives to avoid high-cost loans whenever possible. Zing Credit Union can be your navigator on your financial journey.

Truth In Savings Disclosure

TRUTH IN SAVINGS DISCLOSURE

Except as specifically described, the following disclosures apply to all the accounts.

Rate Information. The dividend rate, or interest rate, and annual percentage yield on your accounts are set forth on the reverse side. The annual percentage yield is a percentage rate that reflects the total amount of dividends/interest to be paid on an account based on the dividend/interest rate and frequency of compounding for an annual period. For Certificates of Deposit and IRA Certificates of Deposit, the interest rate and annual percentage yield are fixed and will be in effect for the term of the account. The annual percentage yield is based on an assumption that interest will remain on deposit until maturity. A withdrawal will reduce earnings.
Nature of Dividends. Dividends are paid from current income and available earnings after providing for the required reserves. The dividend rates and annual percentage yields are the prospective rates and yields that the Credit Union anticipates paying for the applicable dividend period.
Compounding and Crediting. Interest and dividends will be compounded and credited as set forth on the reverse side. The dividend/interest period for each account is also set forth on our Rate and Fee Schedule. The dividend/interest period begins on the first calendar day of the period and ends on the last calendar day of the period.
Balance Information. The minimum balance required to open each account is set forth. Interest is calculated by the daily balance method which applies a daily periodic rate to the principal in the account each day.
Accrual of Dividends. Dividends will begin to accrue on cash deposits on the business day you make the deposit to your account. Dividends will begin to accrue on noncash deposits (checks) on the business day you make the deposit to your account. If you close your account before accrued dividends are credited, accrued dividends will not be paid.
Account Limitations. The account limitations for each account are set forth in our Membership and Account Agreement
Your account will mature on the maturity date set forth on your account receipt or renewal notice.
Early Withdrawal Penalties. A penalty may be imposed if you withdraw any of the certificate funds before the maturity date or the renewal date, if this is a renewal account.
Amount of Penalty. For Certificates of Deposit and IRA Certificates of Deposit the amount of the early withdrawal penalty for your account is 90 days’ interest for a term of 12 months or less, and 180 days’ interest for a term over 12 months.
How the Penalty Works. The penalty is calculated as a forfeiture of part or all of the interest that have been earned on the account. This penalty applies to earned interest and principal.
Renewal Policy. Certificate of Deposit accounts will automatically renew for another term upon maturity. You have a grace period of seven days in which to change or withdraw the funds without being charged an early withdrawal penalty.
Exception to Early Withdrawal Penalties. At our option, we may redeem the account before maturity without imposing an early withdrawal penalty under the following circumstances:
- When an account owner dies
- or is determined legally incompetent by a court
- or other body of competent jurisdiction.
Nontransferable / Nonnegotiable. Your account is nontransferable and nonnegotiable. The funds in your account may not be pledged to secure any obligation of an owner except obligations with the Credit Union.
FEES FOR OVERDRAWN ACCOUNTS. Fees may be imposed on each check, draft item, ATM card withdrawal, debit card withdrawal, debit card point of purchase, preauthorized automatic debit, telephone initiated withdrawal or any other electronic withdrawal or transfer transaction that is drawn on an insufficient available account balance. The entire balance in your account may not be available for withdrawal, transfer or payment of a check, draft or item. You may consult the Funds Availability Policy for information regarding the availability of funds in your account. Fees for overdrawing your account may be imposed for each overdraft, item or transaction. If we have approved an overdraft protection limit for your account, such fees may reduce your approval limit. Please refer to the Rate and Fee Schedule for current fee information.

Checking Comparison Chart

Compare Checking Accounts

Preferred Checking

Clear Card

Second Chance Checking

Minimum Opening Balance

Suggested opening amount- $25

ID Safe Choice Charge Possible

Yes

Direct Deposit

Accepted and encouraged

Dividends Paid

Privilege Pay

Available after 90 days

Overdraft LOC

Available immediately, with approved credit

ATM/Debit Card

Instant Issue

Shared Branching

Available

Free Bill Payer