Qualifying for Auto Pawn Loans with Bad Credit

If you are in need of quick cash for a repair or needed purchase, auto pawn loans might be an option. For many people who are living paycheck to paycheck, or have an unexpected emergency repair, getting the money can be difficult. This is especially true if the person has bad credit, a bankruptcy or a repossession in their history.

A Warning

Auto pawn loans are an available option, but there are some hazards involved with this type of loan. With an auto pawn loan, you are securing the loan with the title of a vehicle that you own free and clear. If the loan is not paid in the allotted time, the car can be repossessed, or the loan can be "rolled over" which means more cost and more interest applied.

Qualifications

Short term auto pawn loans are generally much easier to get than traditional loans as they are secured by a piece of collateral. However, the ease of obtaining the loan doesn't mean that there are not some qualifications for the loan.

Age and Identification

Many of the people who will lend out a short term auto pawn loan will require some sort of ID that will prove your identity and age verification. Usually, but not all the time, the minimum age is 18 with a valid drivers license. This does fluctuate between lenders, but this is generally the rule.

Own Your Vehicle

The nature of auto pawn loans is that you are giving up the direct ownership of your car for the duration of the loan. Since the title is being held as collateral, you can not owe anything on the car itself. You must own it free and clear and have the title in your possession. The vehicle must be in a position where it can easily be taken in the event that the loan is not paid for.

Vehicle in Good Condition

To secure an auto pawn loan your vehicle can not be in a severe state of disrepair. This might mean several different things like:

• No rust
• No mechanical problems
• Car is currently road worthy
• Passes all emission tests

Some people will try to pass off a car with mechanical problems but good looks on the outside to get the loan. However, this can cause the loan to be disqualified and penalties set in place. Some lenders will require proof that the car is in good condition either through inspection or paperwork.

Stable Employment

In order to be eligible for auto pawn loans you will need to be able to show proof of stable employment. Usually this means that you have been employed for several months without any problems or extended time off. Lenders will need to have proof of your income to know that you are going to be able to pay the loan off in a specified period of time.

Know the Loan Specifics

Before taking the actual loan you should know the specifics of the loan so you are not surprised by any of the fees or "roll over" conditions.

Auto pawn loans are a good option for people with bad credit to get a short term loan for an emergency cash crisis but should not be taken lightly.