Registration loans are a type of financial instrument unique to the State of Arizona. They afford quick cash in event of a financial emergency, like auto repairs and medical bills. The convenience relates to the accessibility of funding and the number of loans available to the borrower. How many registration loans can you have in Arizona can vary with the borrower’s needs. The state law allows for a single borrower to have up to five registration loans at any one time.
As a funding source, registration loans offer a type of financing where the borrower uses his or her car’s registration or any registered motor vehicle in the borrower’s name, to secure a loan. With this type of loan, the borrower’s vehicle registration is used as collateral in exchange for quick funding. To qualify for a registration loan, the borrower must present the vehicle registration, not the title, to the lender. This means that a borrower can receive a loan on the registration of a vehicle that they do not own.
Multiple Lines of Funding
Because multiple registration loans can be taken at once, when circumstances merit, borrowers can receive multiple lines of funding, as well. While registration loans are an exceptionally convenient way for borrowers to obtain a loan. However, as with any loan, borrowers should exercise caution and only apply for them when or if it is necessary. In general, registration loans come with high-interest rates with repayment terms that are much shorter than a title loan, another related auto-loan which is often confused with registration loans.
Title Loan vs Registration Loan
Though Arizona offers two similar kinds of auto-related loans, the title loan and the registration loan, there are important differences between the two in order for a borrower to qualify. Namely, as the name suggests, title loans are a type of secured loan for borrowers who have a clear title on their vehicle. In order to use their car’s title as collateral, the borrower cannot have any other liens listed on the title, which means that borrowers can only receive one loan at a time with title loans.
As for registration loans, only the registration of the vehicle must be in the borrower’s name to apply for a loan. By law, as long as the vehicle is registered to you, even if you are still financing it, you are eligible to take out a registration loan. Because having a car registration does not necessarily mean you own the vehicle outright, there is no collateral for the loan. These types of loans without collateral are known as unsecured loans. Unsecured loans are structured differently than those with collateral. Though unsecured loans offer the borrower easy access to cash, it is offered with more short-term loan options.
Other qualifications for a registration loan include a current driver’s license and vehicle registration in the borrower’s current state of residence, with the current vehicle information, i.e., make, model, mileage, year and so on, for the application process. The vehicle must be leased or financed in the borrower’s name and the current vehicle cannot be repossessed or have been subject to liens during the life of the registration loan.
For convenient access to quick cash, registration loans are a solution in the event of an emergency. Due to the speedy application process—borrowers can apply for a registration loan no matter what type of credit they may have because there are no credit check requirements—borrowers should shop for low, competitive rates. Lastly, with no hidden costs built into the loan, like an application fee or a credit report fee, the borrower gets the money that they need without additional costs. For those borrowers seeking a hassle-free loan to provide immediate, short-term financial relief, then look no further than a registration loan.