Yes, even if you have a bad credit score, you can take out a loan against your vehicle.

If you’re having difficulty getting qualified for an emergency loan, you should consider applying for a loan against your car. You can do this by using your car as collateral, even if you are still paying it off.

This means that you can borrow the money against the value of your car and continue driving it. The downside is that car equity loans can be expensive. If you are unable to repay the loan appropriately, your credit rating could suffer – and you may lose your vehicle. 

Before you take out an auto equity loan, here are a few things you should know.

What Are Auto Equity Loans?

Auto equity loans are a form of a secured loan, a short-term loan where you borrow money based on the current value of your car. Car title loans may be particularly appealing to people with bad credit who own a car. You pay back the loan with monthly payments plus high interest, and in case you can’t pay off the debt, the lender could repossess your car.
Car title loans online application process can take as little as 15 minutes, and once you get approved for the loan, you can continue to drive your car.

How Does an Auto Equity Loan Work?

Montana Capital Car Title Loans may offer title loan industry competitive rates and terms to help you cover your financial emergency. Applying for auto title loans with us is fast, secure, and free! It can be completed online as well.

First, complete an online loan application here. This only takes a few minutes. You’ll be asked to provide information like the make, model, and mileage of your car, as well as proof of income documentation.

Then, you will receive a decision within 24 hours or less and find out how much cash you can get against your car.

Apply Today

Submit an application online in just a few minutes. Or, apply by phone with a Montana Capital loan agent at 1-888-700-8900. Our agents are available 6 days a week for extended hours!

Sign Your Contract

Submit your documents online or with one of our loan agents. In these documents, you will provide the make, model, and mileage of your car, as well as proof of income documentation.

Get Your Money

Get your money online! You can either pick up your money in person at a participating location or have it deposited directly into your bank account. Visit a local MoneyGram in your area to pay back your approved funds!

Talk to Montana Capital

Taking a loan out against your car is similar to taking out a loan against your home. You borrow money against its value and repay according to your loan terms. To learn more about your options when using your car as collateral, talk to Montana Capital a licensed title loan lender in US.

How Can I Use My Car As Loan Collateral?

The minimum loan amount varies from state to state. Unlike some states where you can find loans under $1,000, Montana Capital has a minimum loan amount of $2,600 and a maximum loan amount of $20,000.

You can use your car as collateral and get a title loan up to 70% of the value of your car with Montana Capital as long as you have the below requirements.

  • The title of the vehicle in your name
  • A Must be at least 18 years old
  • A valid government-issued ID is required
  • Consistent income to show you can repay the loan
  • Positive equity in your vehicle so it can be used as collateral
  • Credit history is helpful, but may not be the determining factor

When Is an Auto Equity Loan the Right Choice?

Auto equity loans have their benefits. An auto equity loan may be the right choice for you if you need:

Lower interest rates

Title loan interest rates are high compared to a regular loan. There’s no guarantee you’ll get lower interest rates, but because you securitize the loan with a vehicle as collateral, you may get lower rates than a payday loan or cash advance.

Flexibility with payments

Many auto equity loan lenders offer multiple term options to help you find the most convenient loan.

Fast qualification

Unlike traditional loans, the qualification process is fast, does not require too many, and it is completely online.

Fast funding

When you’re in a bind for money, fast funding is crucial. Auto equity loans may be funded in as little as one day, whereas other options like personal loans could take weeks and a lot of paperwork before receiving funds.

Important Details to Know About Auto Equity Loans

If you’re looking for cash but can’t find a loan that will accept you, you may be able to get a loan against your car. But before you take out an auto equity loan, it’s important to understand the costs and risks involved.

Expenses on Auto Equity Loans

Like most loans, auto equity loans charge interest, which is normal when you borrow money from a lender. There are hidden fees associated with a car title loan that you should be aware of. Some lenders include interest-earning fees like DMV lien fees and documentary stamp fees. All repayment plans at Montana Capital are without prepayment penalties or hidden fees.


When you take a loan against your car, you put it at risk of repossession. Your car is the collateral. In the event that you miss your title loan payments, your car can be repossessed and sold at a public auction to compensate for the lost money.

Upside Down

You also risk getting upside down on your car. This means you owe more than the car’s current value. An example of this would be if you get into an accident that totals your car. In this case, you may need more money to repay the auto loan, leaving you with the burden of owing the money and without a car to drive.

The Alternatives to Auto Equity Loans

If auto equity loans don’t seem right for you or you can’t get approved for one, there are alternatives. These options include:

  • Personal Loan – A personal loan is an unsecured loan. You don’t need collateral, but you’ll need higher credit scores and better qualifying factors to get approved with most lenders.
  • Have a Side Hustle or Additional Source of Income – Starting a side hustle or finding a way to increase your income can offset future financial emergencies. You can do anything from shoveling snow, walking dogs, or working remotely as a freelancer.
  • Home Equity Loan – If your home’s value is more than what you owe, you may be able to borrow some of the home equity. Home equity loans are secured loans but have stricter requirements because the loan amounts are typically higher.
  • Credit Card Your credit card may allow a cash advance but proceed carefully. Find out the fees and interest rates because most credit card companies charge a higher APR on cash advances than purchases.
  • Trade-in or Sell the CarIf your car is worth something, you can trade it in for a cheaper car or sell it if you have another car. This will free up a lump sum of cash and help you satisfy your financial emergency.
  • Cash-out RefinanceA cash-out refinance is a refinance of your residence. You’ll need equity in your home and will refinance your first mortgage for one with a higher balance. Cash-out refinance loans take 30 to 45 days to close.

Car Title Loans FAQs

To calculate how much equity is in your car, find out the car’s current value using Kelley Blue Book and subtract any outstanding liens. If you don’t have any loans on the car, the value is your equity. If you sold the car today, you’d receive the full amount.

Using a vehicle as collateral for a loan puts it at risk. If you don’t make your payments and default on the loan, the lender can have the vehicle repossessed as permitted by law. However, you and the lender have a common interest in avoiding repossession. Both parties would incur high costs, so reaching an alternative agreement before repossession is a better option.

Applicants who are approved at Montana Capital can receive up to $50,000. Your ability to repay the loan and the value of your car are some of the factors that will determine how much you can borrow.

Yes, you can. Your car doesn’t have to be paid off to be used as collateral for a title loan. Many factors impact your eligibility for auto title loans. These include:

  • If you are still making payments on your vehicle
  • Your ability to repay your loan
  • The vehicle’s resale value
  • Other credit criteria.

Generally speaking, many people with a few payments left on their vehicle still qualify for a title loan. Contact us at Montana Capital to find out how much your vehicle must be worth to qualify for a title loan.

The Bottom Line

Emergencies can take anyone by surprise. Taking out a loan against your car can provide you with cash quickly, regardless of your credit history. By paying back the loan on time, you’ll resolve your financial crisis and get your finances back in order.

As with any secured loan, if you default, you risk losing your collateral and damaging your credit. Because of this, it’s wise to only use these loans in an emergency — after exhausting all other options.

Using Your Car As Collateral Is Your Best Option?

If a loan that uses your car as collateral is your best option, shop around with a handful of lenders. Compare interest rates, repayment terms, and associated fees to find the loan that’s the best fit.

At Montana Capital Car Title Loans, we serve residents with superior financing options for a loan against their car. Do you want to work with someone who will have your back? Montana Capital can help you research your loan options.

Written by

Samantha Hawrylack

Samantha Hawrylack is a writer for Montana Capital Car Title Loans and a personal finance expert. Sam received her Bachelors of Science in Finance and her Masters in Business Administration from West Chester University of Pennsylvania. She began her career in the financial services industry and shifted to an entrepreneurial role where she could directly impact clients. Sam has an impressive background in personal finance and business management.