Options for Getting a Personal Loan with Bad Credit in Texas

When your credit is less-than-perfect, you know it can be really tough to get money when you need it. Banks won't lend you money if you don't have excellent credit, and you may find it impossible to even qualify for an unsecured credit card. Just because your credit is bad, though, doesn't mean life won't throw emergencies your way. What do you do when you need to fix your car, pay medical bills or cover the rent or mortgage?

These are just some ways to obtain a personal loan in Texas if your credit could use some work, including payday loans and Texas car title loans.

Pawn Loans

There are dozens of pawn loans in San Antonio, Dallas and Houston. Pawn shops will give you a loan based on the value of collateral you bring into the shop, and one advantage is you can pawn just about anything and get a loan in under an hour. The downside? The pawn shop will hold your item until you pay back your loan in full, on time and with interest, which is usually very high. If you can't pay back your loan on time, the pawn shop will sell your belonging to someone else to cover what you owe.

Texas Car Title Loans

Dallas car title loans are also available to you and do not require a credit check. You can qualify for car title loans in Texas as long as you own your own car, truck or motorcycle free and clear, or have just a few payments left on a car loan. The amount of money you receive is based on your car's year, make, model, mileage and condition and this is one of the best options if you need a lot of money in a hurry. Depending on your vehicle's value, you can receive up to $15,000.

Unlike pawn loans and payday loans, Dallas car title loans are secured. This means your car serves as collateral and, if you default, your vehicle will be repossessed and sold. One big advantage is you continue driving your car while you make payments and get your title returned when the loan is paid off, so you never have to give up your vehicle if you keep up with the loan payments.

Texas Payday Loans

Payday loans can seem a lot like car title loans in Texas on the surface, as both are available with no credit check and give you money in under an hour. Payday loans, though, are usually for a much smaller amount of money (often around $500) and they're due in two weeks. That's because payday loans are not secured so lenders must limit their risk. Payday loans may be a good option if you don't need a lot of money or you don't own a car.

Peer-to-Peer Lending

Finally, peer-to-peer lending may be an option to you. This allows you to get a personal loan from an individual, not a bank, but your credit will still matter and determine how much you can receive and what sort of interest you will pay. Expect to get a high interest rate, and remember it may take awhile to find someone willing to lend the money and even to receive it, as these are not same-day loans.

How to Get a Personal Loan in Dallas with Bad Credit?

It's true that the economy is slowly recovering, but this doesn't mean that millions of Americans aren't still struggling to get by. Millions were hit by the economic collapse with job loss, foreclosure, bankruptcy and debt. If this describes you and you've been working to rebuild your life, you probably already know that banks aren't too forgiving of bad credit, regardless of the reason. If you need money to pay the rent, repair your car or pay bills, you may even be feeling pretty desperate for a small loan to get you through.

The good news is there is one option you can always turn to, even with bad credit, and that's car title loans. Dallas has plenty of reputable lenders who will not run your credit and allow you to take out a loan against the value of your car, truck or motorcycle.

Getting a loan with bad credit couldn't be easier with Dallas car title loans available to all Texas residents over the age of 18 who own their own vehicle. Title loans require just a five minute application process with instant online approval. You can even have the cash in less than an hour.

Car title loans in Texas can be a smart choice when used responsibly to get through a short-term emergency of any kind. While a bank won't loan you money with bad credit, a title loan provider will give you anywhere from $1,500 to $15,000, which is based on your car's value.

To qualify for Dallas car title loans, you must be at least eighteen years old and own your own vehicle with a clear title, although some lenders will still give you a loan if you have a small balance remaining on a car loan. In this case, the loan from the title lender will first pay off your car loan, and you will keep anything left over.

While car title loans in Texas are great as an emergency source of money, they must be used responsibly and never frivolously. If you default on your loan, the lender can repossess your car, sell it at auction and even come after you for the remaining balance you owe. Only borrow what you can afford to repay, and what you need to get through the emergency.

It's also a good idea to compare loans between lenders, too, because the interest rates and terms will vary by lender. Look for the best rate and don't sign if you aren't comfortable, no matter how rushed you feel to get the money. After all, twenty minutes of shopping around may save you hundreds in interest charges, and ensure you'll be able to afford your loan.

If you're in a tough situation, consider turning to title loans to get the money you need, but don't give in to temptation and borrow more than necessary. You'd be surprised how many people are offered more money than they asked for when the lender checks the equity in their car! Put together a budget before you go loan shopping and know what you can afford every month, and plan to pay back your loan as fast as possible to reduce interest charges and avoid any consequences.

Avoiding the Worst Case Scenario with Your Texas Car Title Loans

Texas car title loans work in many ways like payday loans. Both loans provide a fast, simple application and approval process to get you the money you need in a hurry. With payday loans, your lender will need personal information like your income, but they will not check your credit. Payday loans are short-term, unsecured loans, so you do not have to provide anything as collateral. This means they come at a much higher risk to your lender with a higher interest rate for a lower amount of money, which is usually between $150 and $1,000 in the state of Texas.

While payday loans and Dallas may seem alike on the surface, they are very different animals. With Texas car title loans, lenders will still need the same information and not perform a credit check, but these loans require the use of your car or truck as collateral to secure your loan. When you apply for car title loans, San Antonio lenders will look at the value and equity in your vehicle and use this to determine your maximum loan amount. Your loan amount will likely be much higher than that of a payday loan because it's secured, so you may get anywhere from $1,000 to $15,000. You will also need to give the lender your title until you pay off your loan.

Dallas Car Title Loans Are Not a Long Term Option

While your title loan provider will give you anywhere from one to three months to pay back your initial loan, you have the option of rolling your loan into a new one if you can't pay the balance back in full on time. You should avoid rolling over your balance at all costs, though, as this will mean you take longer to pay off your loan for additional interest charges, and extra fees to roll it over. As your balance gets higher, it will be even harder to pay it off and get your title back. This is why you should only borrow what you know you can afford to pay back!

Keep in mind most lenders will work with you to rearrange your payment agreement, but you need to call them as soon as you realize you're having problems. If you don't contact them and stick your head in the sand, defaulting on your loan, you will only make things worse and the lender will have the right to repossess your car with no notice, require you to pay the full balance before you get your car back, sell your car at auction and sue you for the remaining balance after your vehicle is sold.

The bottom line is Texas car title loans are a great resource, but they need to be used responsibly. Lenders do not want to repossess your car because it costs a lot of money and they rarely recover what you owe. Only borrow what you can afford to repay on time and always contact your lender if you're having trouble making minimum payments.

A Look at Legislation on Dallas Car Title Loans

Back in 2011, the city of Dallas passed legislation that directly impacted car title loans. Dallas passed these laws to protect consumers' rights, so it's important to understand how this legislation impacts you if you're thinking of turning to one of these short-term loans. With the passage of these lending practices for car title loan and payday loan businesses, Dallas became the first city in Texas to produce such laws.

These laws against Dallas car title loans were backed by many organizations, including the Anti-Poverty Coalition of Greater Texas, the United Way of Greater Dallas, Catholic Charities, the Friendship West Baptist Church and many others, all of which came together with the belief that interest rates up to 500% were simply too much. 

Texas car title loans received a reputation for creating cycles of debt for consumers who turned to these loans. After all, when you turn to a title loan, you are placing your vehicle at risk for repossession, and this may be one of your most precious possessions and something you need to work. What's more, interest rates can be a bit confusing and there is no ability to make a partial payment in most cases. Consumers who can't pay back the initial loan on time typically roll over their initial loan into a new one at the same interest rate with the balance remaining untouched. If you can't pay the loan back in full, your car will be repossessed and sold.

The bills passed by Dallas were designed to enforce the industry and require lenders to register with the Office of Consumer Credit and pay a licensing fee to go toward the Texas Financial Education Endowment. These laws also require lenders to report consumer transaction data and post an OCCC helpline number and even offer restitution for consumers who were financially injured by a CSO violation.

There is also now a zoning ordinance that forbids providers of payday loans and Dallas car title loans to operate within 1,500 feet from a similar business, within 300 feet of a residential district and within 500 feet of an expressway.

It is certainly true that unregulated and unlicensed lenders may diminish property values, make crime more prevalent and cause further financial grief to consumers who are already struggling. That's why it's so important to seek out a reputable lender, but it does not mean that the industry as a whole preys on individuals or that car title loans in Texas are an unnecessary service.

Are Car Title Loans Really a Bad Idea?

The truth is, car title loans in Texas are a necessary service. If you have bad credit, you cannot obtain a loan from a traditional lender. If you're facing a sudden emergency, like a broken down car or an inability to put food on the table, you may need cash in a hurry to help you get through until payday.

Consumers must learn to be wise about finances and read and understand the information presented before signing any documents. If you cannot afford the cost of a car title loan, it is not going to be a healthy solution to your problem. If you can, however, afford the loan and simply need money to get you through a tough spot, title loans can be a smart choice if used responsibly.