If you get a title loan, that means you leverage your car and get money from a bank or some other lending entity. You might also call this a secured loan. You’re using an asset, your vehicle, in this case, to get money when you need it.

You might also hear about salvage titles. A salvage title means an insurance company has classified a vehicle a certain way. They have assessed it, usually following an accident, and determined that it requires a total loss status.

Can you get a title loan on a salvage title when you need the money, and your car remains your most viable asset? It’s an interesting question and one we’ll answer in the following article.

How Do Cars Get Salvage Titles?

First, let’s talk about how vehicles get salvage titles. As we mentioned, an insurance company usually has no reason for a vehicle assessment unless you crash your car. When you do, an assessor who knows about vehicles will check it out.

You might have an assessor come look your car over for another reason, though. Maybe someone stole it. An assessor must look at the vehicle and determine whether there’s any hidden damage you didn’t notice when you retrieved it. You may have a car with flood damage or some other natural disaster damaged it.

Different states and regions might have dramatically different ideas regarding what cars meet the salvage title definition. You may have a vehicle that doesn’t seem too bad, but it may still get this status if you’re in a territory or state that judges car damage harshly.

You may also have the assessor look over the vehicle, and even if you have no experience judging car damage, you can see this vehicle has experienced a severe accident. If so, you can feel sure the assessor will consider the car a salvage title case.

At that point, you can consider whether getting a title loan on the damaged car makes sense.

Getting Title Loans on Salvage Title Cars

In some instances, you can get a title loan on a salvage car from a bank, credit union, or some other lending entity. However, it’s not so easy.

If an assessor looks your car over and says it deserves salvage title status, that does not necessarily mean you can’t drive it anymore. As we mentioned, some states or territories have much more stringent rules about salvage title qualifications. Perhaps you can drive the car after you put in some repairs.

If you can’t get insurance on the car, though, that might prevent you from getting a title loan. Lending entities usually wants insurance for the vehicles they give title loans. If you can’t get that insurance, you’re driving your car around unprotected. Most lending entities won’t give you the title loan you want in those instances.

You Probably Can’t Get as Much Money

Assuming you can still get insurance on the car, even if it has the salvage title status at this point, you might get a title loan from certain credit unions or banks. However, they likely won’t give you very much money.

If you have a brand-new 2023 Jaguar without a scratch on it, and you use it for a title loan, you can probably get several thousand dollars with no issues. A bank or some other lending entity sees that you have a valuable asset in vehicle form, and they’ll give you money accordingly.

A car that’s on its last legs and has a salvage title might still get insurance, but you can’t get as much money. When you look at the lending entity’s viewpoint, you can easily see why.

Do You Have Other Options?

If you need money badly, and a lending entity won’t give you what you need because your car has achieved salvage title status, you might get cash other ways. If you have a house, you can get a secured loan with it. This carries some risks, though.

If you cannot repay the loan on time, the bank or other lending entity you used can take your house. You can also get money through an unsecured loan, though you might pay higher interest rates. If you have better credit, you can probably get an unsecured loan, and you’ll get lower interest rates as well.

Using a salvage title car still gets you a title loan in some cases, but if that doesn’t work, you have other options.

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