TFC Title Loans is a title loan lender with offices in California, Arizona, and New Mexico and it was founded in 1994. This article provides an in-depth review of the pros and cons of getting a pink slip loan with TFC Title Loans.
What is a title loan?
An auto title loan, also known as a pink slip loan, is a loan that uses the value of your car as collateral or security for the loan. To receive a title loan, you must give the lender your vehicle’s title (the pink slip). However, you still get to keep and drive your car, as long as you make your monthly payments. Once you pay the loan in full, you get your title back, and the lien on your vehicle is removed.
The advantages of a title loan are you don’t need great credit to qualify and borrowers with fair to bad credit can get much larger loan amounts than with other sources of credit.
The big caveat is that auto title loans are not cheap. Although TFC Title Loans offers lower interest rates than most car title loan lenders, the APR still ranges from 96% to 120% (as of October 2016). Also, if you default on the loan, the title company will take possession of your vehicle.
How do TFC Title Loans work?
TFC Title Loans offer same day funding on your pink slip loan. There is no application fee and loans range from $1,000 ($2,600 in California) to $50,000. The amount you qualify for is based on the value of your vehicle. The loan terms range from 24 to 36 months.
The application process starts by completing an online form.
You will need to provide you name, email, telephone number, vehicle model and year, address, date of birth, and SSN. The SSN is optional.
Once you complete the application form, a TFC Title Loans representative will call you or email you and tell you how much cash you can get.
Who qualifies for a TFC Title Loan?
To be eligible for a TFC Title Loan you must meet the following requirements:
- Own a vehicle with a value of at least $2,000. In California, the car must be worth a minimum of $4,000.
- Proof of monthly income (at least $1,200)
- Have a driver’s license
- Proof of residence, such as a utility bill
- Notice you must own the vehicle outright. TFC Title Loan will not consider your loan application if you have to make payments on your vehicle.
- Six references, one of them being a family member.
What are the interest rates and fees for a TFC Title Loan?
TFC Title Loans charges a monthly interest rate on all its loans. The rate is not advertised on its website but we called TFC and were quoted a monthly rate ranging between 8% and 10% (as of October 2016). That is the equivalent of 96% to 120% APR. Needless to say, this is not a cheap source of credit. If you have good credit you may qualify for TFC VIP Loan Program, which as rates as low as 36% APR.
On the bright side, TFC Title Loans does not charge prepayment penalty fees. That means you can save a lot of money by paying off the loan early. For instance, a $50,000 loan for a 30-day period would cost $4,000 to $5,000.
Title loans are best used as short-term emergency loans when you do not qualify for cheaper sources of fast credit, such as credit cards and lines of credit.
What are the pros and cons of borrowing from TFC Title Loans?
Let’s start with the bad:
- Although TFC Title Loans has lower interest rates than most title loan lenders, its interest rates are still high.
- Only available in California, Arizona, and New Mexico.
- Limited to vehicles with a wholesale value of $2,000 in New Mexico and Arizona and $4,000 in California.
- You can lose your vehicle if you don’t make payments.
- TFC Title Loans offers one-day funding and applications are approved within one hour.
- Loan amounts range from $1,500 to $50,000.
- You only need a monthly income of $1,200 to qualify.
- Even if you have poor credit, you can be eligible for a loan of up to $50,000. Although TFC Title Loans will pull your credit, it is not used to determine your interest rate. The value of your vehicle is the primary factor when determining eligibility.