What Is a Registration Loan?
A registration loan, sometimes known as a title loan, is a lending method that allows people to fulfill their emergency financial needs by leveraging their vehicle's registration. This lending facility, where the registration of a car is kept as collateral, is available only for the residents of Arizona.
Registration loans are slightly different from title loans as they do not require you to own your car outright. However, a vital requirement is that your car must be registered in your name.
Now you might be thinking about the cash an individual can borrow through registration loans. Well, a lot depends upon your employment status and income because lenders often consider them to finalize the amount you can borrow. Usually, you are allowed to borrow any amount between $200 to $4,000 using registration loans.
What Are the Basic Requirements for Registration Loans?
No matter how much funds you want to borrow, there will always be these basic requirements to qualify for registration loans:
- You must possess a valid driver's license and vehicle registration of the state where you currently reside
- The vehicle should be financed or leased in your name
- The vehicle cannot be repossessed or have any liens placed on it while the loan is in effect
- You must be ready with your current vehicle's information (make, model, year, mileage, etc.) while filing the application
Registration Loans Vs. Title Loans
Before considering a car registration or title loan, you must understand these loan types. They have many similarities and differences.
Similarities Between Registration Loans and Title Loans
A good credit score is not necessary to get approved
Both registration and title loans do not require the borrower to have a good credit score. The credit requirements for these loans are minimum. Whether you have good, fair, or bad credit, your likelihood of getting approved for these loans is high.
Borrowers can apply online
There are some lenders that offer car title loans and registration loans online. You may apply (and qualify) for such loans, even from your home.
Borrowers are not penalized for paying off their loans early
Sometimes you may receive unexpected cash as a bonus or birthday gift. The lender won't penalize you if you use it to pay off your car registration or title loan early.
Differences Between Registration Loans and Title Loans
Only vehicle owners qualify for car title loans
You must possess a paid-off vehicle to apply for a car title loan. However, you can apply for a registration loan if you are still paying for your car or just having a leased car.
Borrowers may receive significant amounts through car title loans
Borrowings through car title loans are often higher than vehicle registration loans. You may qualify for any amount between 25% and 50% of your car's value with a title loan.
Car registration loans may have high-interest rates
Borrowers' vehicles are not used as collateral in car registration loans, and this makes them riskier. The registration loan interest rates are higher due to the increased risk.
Can I Get Registration Loans through CocoLoan?
No, our partner lenders do not offer this type of loan. But you can apply for a title loan through CocoLoan. The entire process involves only these three steps:
- Just fill up and submit the online application form that asks for your personal and financial situations. You'll also be required to provide only the basic details about your car, like its model, how much mileage it gives, etc. All this will take around three minutes. Following that, CocoLoan will send your request for assessment to our vast network of lenders.
- After reviewing your information, one of our title loan lenders will get in touch with you and reveal the location of the nearest lending facility. You can drive there with your car title. They will do an in-depth evaluation to determine the worth of your vehicle. You can also get a title loan with no store visit. The lender will send a representative to your home.
- Once you accept the offer, the approved loan amount will get deposited in your account as soon as the next business day.
How Does CocoLoan Compare
|Why Trust CocoLoan?|
|How much can you get?||$50 to $35,000||Zero upfront charges|
|What are the loan terms?||1 - 36 months||Easy repayment|
|Are credit checks needed?||Yes||Mostly soft pulls|
|Are bad credit accepted?||Yes||All credit considered|
|How to apply?||Totally online||Simple and straightforward|
Should I Get Registration Loans or Title Loans?
Whether you choose title loans or registration loans relies entirely on your situation. Registration loans are typically advantageous for people who want to borrow a small amount and are still making payments for their vehicles. Owners of cars with clean titles who need access to more money tend to do better with title loans.
Before choosing, think about whether you currently own a vehicle and how much cash you require. This might assist you in deciding between a title loan and a registration loan. In any case, it's essential to consider the loan's conditions and expectations for repayment before signing over the car's title or registration.
Can a Motorcycle Be Used to Get a Registration Loan?
Yes, you can get a registration loan on your motorcycle. Note that a registration loan is not limited to a vehicle's make or model. Different types of automobiles are eligible for a registration loan. However, note that you may receive a specific amount or less than what a title loan would provide.
How Much Do Registration Loans Cost?
The cost of registration loans is determined by your borrowing capacity and loan term. Monthly rates, which must comply with the rules and regulations of Arizona, can vary from 15% (180% APR) on loans above $500 to up to 17% (204% APR) on loans under $500.
How Much Can I Borrow with Registration Loans?
Depending upon your requirements and the information provided in the loan application, you are often allowed to borrow any amount between $200 to $4,000. On average, registration loans are funded for approximately $400-$500.
What If I Can't Repay My Registration Loan?
Sometimes, people fail to repay their registration loans due to unforeseen circumstances. If you also fail to pay back, you'll witness the lender doing at least one of these two things:
- Either try to collect the money on their own
- Assign your account to a third-party collector
Though it happens rarely, the lender might take further action and file a lawsuit against the borrower in civil court to recover the remaining amount. As a result, the defaulting party's earnings may then be seized.
If you see any possibility of defaulting on your registration loan, contact your lender and ask if they may extend the duration of your loan, which would decrease your monthly payment. You may prevent the repercussions of failing on a car registration loan by contacting your lender.