The first place most people go when they need quick cash is to the bank.
Then they get rejected.
It’s not uncommon. Banks and other traditional lenders have rigid standards, long application processes, and zero patience for borrowers with spotty credit histories. So what do you do if you get denied? Especially if you got denied by every bank in town?
Easy. Borrow somewhere else.
Short term borrowing solutions have come a long way in recent years. Understanding all your options is incredibly valuable when every second (and dollar) counts.
Let’s break down:
- Why banks shouldn’t be your first stop.
- How car title loans work without a car title.
- Other short term alternatives to consider.
- What to look for before applying.
Ready? Go.
Alternatives to Bank Loans For Bad Credit
First: why banks aren’t your only option.
Banks don’t want your business…unless you’re already financially stable.
Good credit score? Great. Consistent income with years of verified history? Even better. But if you’re like many Americans living paycheck to paycheck, neither of those things apply to you.
In fact, PNC Bank found that 67% of American workers live paycheck to paycheck, up from 63% just one year earlier. That isn’t a negligible subset of the population. That’s most of the country.
When you live paycheck to paycheck, an unexpected car bill, medical expense, or lost day of work can throw off your entire month. Banks offer zero flexibility for these situations. That’s where alternative lenders can step in.
Car Title Loans Without A Title?
Wait…can’t you only get a car title loan if you…have your title?
Car title loans are one of the most popular (and most misunderstood) options for emergency short term funds.
Here’s the common misconception. You take your car title to the lender. They hold onto it, and you get the money. Done. But what if you…
Don’t physically have the title to your vehicle?
If you’ve ever dealt with title loans, chances are you’ve heard somebody say it’s impossible to get title loan funding without a title. And while that may have been true in the past…modern lenders have changed how these loans work to benefit the customer.
Some lenders specialize in giving out title loans without any physical title on hand. Getting a loan without a physical title is possible by using documentation like registration records and insurance information (or even a direct DMV lookup) to prove vehicle ownership. No loan company will ever ask you to mail your physical title anywhere, so keep that in mind if someone suggests it.
In 2024, an estimated 5.2% of Americans used auto title loans to access emergency cash. That’s up from 3.7% in 2023. Short term lending is quickly expanding thanks to new online lenders with less stringent guidelines.
Before applying for a title loan, here’s what to know:
- The loan is secured by your vehicle, not the title.
- Loan amounts will vary by lender but are generally between $100–$1,000.
- Repayment periods are short (like 30 days) although there are lenders who offer installment terms.
- A credit check is unlikely to be required.
As always, double check that any lenders of interest work within the state and follow local regulations. This industry is particularly confusing because each state has its own set of rules.
Alternatives to Banks For Emergency Cash
Alright, title loans aren’t the only option. Here are some alternatives to consider if a bank won’t work.
Traditional Payday Loans
Payday loans are small, unsecured loans that are meant to be paid off with the next paycheck. Though they’re easy to obtain (with sky-high interest rates), payday loans should be used sparingly.
Ideally, a payday loan is used as a last-ditch effort to cover an unexpected expense rather than a consistent repayment cycle. Expect interest rates to be higher than other types of loans.
Online Personal Loans
Online lenders have revolutionized short term loans. Many offer same day deposit with no credit check for pre-approval and more flexible repayment terms than your bank.
Credit score requirements will vary from lender to lender, so don’t assume a low credit score automatically disqualifies you.
Credit Union “Payday Alternative Loans”
These little guys are hidden gems. Credit Unions offer what are called PALs, or Payday Alternative Loans. Created specifically to help members who wouldn’t qualify for traditional bank loans, these have triple-digit interest rate caps set by the NCUA. Read: the cheapest option out there.
Beware of credit union membership requirements. Some will have you wait months before becoming eligible for loans.
Credit Card Cash Advances
Got an old card with some credit on it? Take out a cash advance. Cash advances are quick, and there’s no need to go through a new application process if the card is already in hand. This option comes with two big drawbacks:
- Cash advance rates are higher than regular card purchases.
- There is no grace period. Interest accrues immediately.
Which Emergency Loan Is Best For You?
Believe it or not, there is no correct answer to this question.
Every borrower has unique needs, but there are two vital questions worth asking before applying for any loan:
- How much is needed? (And how much can realistically be paid back?)
- How quickly does it need to arrive?
If there’s steady collateral with proper documentation and money isn’t needed urgently, a title loan might not make sense. On the flip side, if credit is in poor shape and cash is needed fast, the world of payday loans may be the best bet.
Regardless of what you choose, know what you’re getting into. Ask the tough questions about repayment before agreeing to take out the loan. Running into trouble after funding is received is unfortunately a common occurrence.
Can a payment on a title loan be missed? Sure. Will the car get repossessed if it is? Also sure.
Can a payment on a bank loan be missed? Absolutely. Will it damage the credit score if it does? You guessed it.
Know the situation, know the limits, and borrow responsibly.
Emergency Cash FAQs
Can you get a car title loan without the title?
Yes! As mentioned above, many online title lenders will accept other documentation verifying ownership of the vehicle. Mailing in a title to receive funding is never required.
Do car title loans run a credit check?
In almost every case, no. Since title loans are secured by the vehicle, there’s no need for a credit check. Just be sure repayments are manageable before signing on.
What happens if a title loan can’t be paid back?
If payments on a title loan are missed, the lender is legally allowed to take possession of the vehicle. Don’t borrow more than can realistically be afforded.
Closing Up Shop
Alright. Let’s recap.
When emergency funds are needed, banks shouldn’t be the first (or only) stop.
Short term loans like car title loans without the title, online personal loans, credit union loans, and payday loans were all created because banks don’t cater to everyone. Learning how each one works, and what situations they’re best for, is the first step to becoming a smart borrower.
Remember:
- Know what collateral can be offered.
- Don’t just accept the first loan company you find.
- Ask the hard questions upfront about repayment.
- Use short-term loans as a bridge, not a solution.
There are plenty of options if you know where to look. The hardest part is arming yourself with knowledge.
Peyman Khosravani is a global blockchain and digital transformation expert with a passion for marketing, futuristic ideas, analytics insights, startup businesses, and effective communications. He has extensive experience in blockchain and DeFi projects and is committed to using technology to bring justice and fairness to society and promote freedom. Peyman has worked with international organizations to improve digital transformation strategies and data-gathering strategies that help identify customer touchpoints and sources of data that tell the story of what is happening. With his expertise in blockchain, digital transformation, marketing, analytics insights, startup businesses, and effective communications, Peyman is dedicated to helping businesses succeed in the digital age. He believes that technology can be used as a tool for positive change in the world.
