Useful Car Title Loan Glossary

At 5 Star Car Title Loans, we think it’s important to understand all the terminology involved when taking out a loan.

This glossary is intended to help you understand terms and definitions related to car title loans. If you know what you’re looking for, you can go straight to the letter you need or use the search box below

A B C D E F G H I K L M O P R S T

A

Amortization – This is the way of calculating how much your monthly payments will be so that it is paid off at a certain date. It includes the balance that is outstanding and interest that has been accrued.

Amortized Loan – A loan that is set up to be paid back in regular payments that include both principal and interest. The payments are more or less the same amount each month.

In the field of lending, amortization means that the scheduled payments are split up into several equal installments, according to the amortization schedule

Annual Percentage Rate (APR) – The annualized rate of interest for the year, instead of only a monthly fee or rate, as appears on title loans.

This is the finance charge shown as a yearly percentage rate, which shows how much interest is being charged on your loan contract.

Auto Equity Loan – This is often called a Car Title Loan or a Car Equity Loan.

It takes advantage of the amount of equity in your car. You give up your car title but you can get a cash loan. When the loan is repaid, the lender sends back your car title.

Autopal – Autopal is a secure online site that the customers of 5 Star Car Title Loans can use to manage their accounts.

By using your Autopal account, you can watch the funding of your loan, check your car loan’s current balance and print your transaction and payment history. You can also make your title loan payments online or get the payoff details.

B

Bad Credit Score – Bad credit is typically a FICO score. If it is found to be 629 or below by the Consumer Federation of America and National Credit Reporting Association (reported by the Associated Press) then it is poor credit.

You can still get a title loans even if you have bad credit score!

We don’t check credit scores, so this isn’t a problem for a car title loan. Do you have a bad credit score? – Apply Now!

Bad Credit Score can keep you from getting the best terms for a credit deal. You might be approved, but the interest rate could be higher.

Black Book – The Black Book is a useful guide with the value of new or used vehicles. It is similar to the Kelly Blue Book, except dealerships use this one to evaluate the current selling price, or the actual liquidated value of a vehicle. That is the price used to determine what a vehicle like yours is selling for to find out the car liquidation worth value.

As an example, you may own a car worth $12,000, but the current selling prices in the Black Book is much less.

*The Black Book, like the Kelley Blue Book, contains info regarding a car, van or truck’s value. The value of a car in the Black Book is based on information gathered from wholesale vehicle auctions.

Branches – 5 Star Car Title Loans has several branches scattered throughout the state of California.

Stop in at the title loans branch near you. Chat with our loan officers, who can help you get your loan processed and funded. Keep in mind that you can’t make payments at the branch locations.

C

Car Details / Condition – Some of the details of your car that we look at when determining the title loan value of the car you want to use as security for an auto title loan are its year, mileage, make and model.

For the additional requirements needed for title loans, you can refer to our guide: How Do Title Loans Work.

Car Title – The certificate of the title for any vehicle in the US is called a car title or pink slip. As a legal document, it establishes either a person or a business as legal owner for a vehicle.

Each state in the US has a Department of Motor Vehicles, or the DMV, which issues the vehicle’s titles.

Certificate of Title – The Department of Motor Vehicles provides this document that you can use to prove ownership of your vehicle. See Car Title.

Clear / Clean Title – Paying for a vehicle with cash gives you a clear title.
However, if you took out a bank loan for the purchase, then even though you’re the registered owner of the vehicle, the bank would put a lien on its title to secure it until it is paid off.

To have a clean title, you need to pay off the loan so the bank will be taken off your title. After paying it off, if the bank is still written on the title, send a letter to the bank asking them to release the lien. The other option is for them to sign on the title itself so it will be a clear title.

Collateral Loans – Collateral is the item or property that borrowers offer to a lender for securing a loan. The lender has the right to seize the item used as collateral if the borrower doesn’t make the required loan payments.

Collateral is what gives security to the lender, just in case the borrower doesn’t pay the loan back. Loans that are secured by collateral usually have interest rates that are lower than most unsecured loans.

Creditor – The loan company or lender financing the loan.[/montana_question_noschema][montana_question_noschema question=”Credit History”]Credit History – Your financial history that lets the lender know your ability to repay loans.

Creditworthiness – A borrower’s ability for repaying debts.

Credit Score / Credit Rating – After analyzing an individual’s credit record, in the US the credit score is taken to represent that person’s ability to pay back debts.

Credit Scores are meant to serve as the measure of risk for default. This takes into account the financial history of that person.

*This isn’t a problem for getting a car title loan, because we do not regard your credit score.

Credit Scoring System – The system based on credit history and historical data that we use to examine a borrower’s creditworthiness.

Current Account – A current account is one where all payments that are due have been made, and the customer hasn’t fallen behind.

D

Default – Failure to make payments according to terms of the loan agreement, or breaching the credit agreement.

Disclosures – The information regarding the vehicle’s history that is reported to a customer. This usually includes issues with the title, past damage and repairs.

DMV – or the Department of Motor Vehicles. Each state in the US has its own Department of Motor Vehicles (DMV), which bears responsibility for driving permits, driving licenses and personal identity cards.

It also issues personal and commercial registrations for vehicles including motorcycles, trucks, cars and boats.

E

Equity – When subtracting the value of your liabilities from your assets’ value, you have the amount of equity.

Positive equity in your car happens when your vehicle’s value is worth more than the amount you owe on it.

Equity in the Car – As far as car finance goes, equity is the difference from a vehicle’s value and what is left to pay on the car’s loan.

Take as an example a car that is worth $10,000 and $3,000 remains to be paid according to the finance agreement. That would mean there is $7,000 equity left in the value of the vehicle.

F

FICO Score – FICO score, created by FICO, is the way credit risk is measured to find a credit score. The credit score was created by FICO, which used to be called Fair Isaac Corporation.

G

GPS Installation Center – Finish the title loan process and the loan payoff by going into one of our GPS Centers*.

*GPS Centers are Car Stereo Shops and Audio Shops especially known for installing and removing Anti-Theft devices into vehicles.

Grace Period – The amount of time when a payment is due during which a penalty won’t be added on to a late payment. With title loans, interest still continues accruing during this grace period.

H

Hidden fees – It’s not always easy to find hidden costs and charges, since they’re not always included in the total price. We do not charge hidden fees.

I

Installment Loans – An installment loan has a specific number of payments that are spread out over time. There are various loan types, such as mortgages, auto title loans and installment loans for bad credit.

Interest – Like finance charges, interest is how much the lender adds on to a car title loan to a borrower. It can be listed as a monthly rate or an annual percentage (APR).

K

Kelley Blue Book – a firm that publishes a list of current retail and wholesale values of vehicles according to Kelley Blue Book, Inc.

L

Late Payment – A title loan payment that was not made on time.

Lien Holder – The person who has legal rights to ownership of a vehicle in case you default on a contract.

Lien holders are oftentimes lenders, but you can get a lien if you’ve had your vehicle repaired by your mechanic but didn’t pay the fees. This is a mechanic’s lien. Also referred to as a Lien.

Loan Amount – How much the borrower agrees to repay, as is written in loan contract.

This is including the amount of the check received by the customer as well as fees that are included in the loan.

Loan Calculator – With the car title loan calculator tool, our customers are able to quickly calculate their payment estimate, full repayment schedule and interest rate before coming into our office.

The following example demonstrates 36 month title loans*

*Our repayment schedules don’t have prepayment penalties or hidden fees.

Disclosure: Not very application is approved. Approval depends on certain underwriting criteria as well as the borrower’s ability to pay. There can be additional loan restrictions.

Loan Fee & Processing Fee – There are lenders who charge fees for processing and administrating paperwork.

The fees are normally put into the loan, rather than an “up front” amount charged for you to get the funding. It is sometimes called an Administrative Fee.

Loan-to-Value Ratio – The LTV ratio gives the percentage of the difference between the vehicle value and the loan amount.

M

Market Value – A car’s market value is usually less than its retail value. It takes several variables into account, such as vehicle condition, accident reports, mileage and service history.

If selling a car privately, market value is typically the price it can be sold for.

MoneyGram – MoneyGram International Inc, located in the US, is a company that transfers money. Our title loan customers are free to go to any MoneyGram location for their money and to make cash payments.

Monthly Payment Amount – Our company’s payment policy is one payment each month, the first of which is due exactly 30 days after the loan begins.

O

Odometer – Used to measure distance traveled by a car.

Online Title Loans – 5 Star Car Title Loans have an Online title loans application process that you can use. It takes only a few minutes to finish.

You can send your auto title loans inquiry online without needing to wait on the phone. We will evaluate your car and determine if it qualifies. This can help the title loan approval process go more quickly.

P

Paperless Title – or an electronic title.

5 Star Car Title Loans incorporates a DMV program so an electronic version of your title is saved with the lienholder. After payoff, the electronic lien is released and you’ll get your paper title back.

Pawn Shop Loan – A loan that is based on some piece of collateral that’s handed over to a pawn shop. Our company does not deal with pawn shop loans.

Pay Day Advance Loan – also called a cash advance loan, these are loans based on employment and payroll records. Our company does not issue pay day loans.

Payoff – At 5 Star Car Title Loans, there is no problem with early payoff of your loan. After the payoff, we’ll send your title to you without hidden fees or prepayment penalties.

Tell us before you plan to prepay, so we can give you the final amount.

Pink Slip – Another name for your car’s title.

Processing Fee – Every title loan that is approved is charged a processing fee. Ours is $75.

Poor Credit – Credit below average, also known as bad credit.

It can include repossessions, bankruptcy, foreclosures and late pays. You can still be approved for an auto title loan even with poor credit.

Pre-Approval – A first stage when applying for a loan where the loan officer can give the borrower a loan amount that has been pre-approved.

Prepayment Penalty – A fee some lenders will charge for early payoff of the loan. We do not charge prepayment penalties.

Principal – The final amount that is owed towards a car title loan. It doesn’t include the remaining interest.

Proof of Income – Proof of Income, or POI, can include proof such as monthly bank statements or social security payments – not only salary stubs.

*Proof of Income is one of our requirements that you do need for a title loan.

Proof of Residency – Can be a lease agreement, a driver’s license, utility bills or any other form with the borrower’s place of residence. Also called a POR.

R

Refinancing / Refinance Your Car – To refinance a current car title loan, such as when the customer needs extra money or wants to change the loan terms. Call us for more details.

Registration Service Center – Registration Centers* that we do business with offer DMV services and is one of the stops you’ll make when completing the online loan process. Call us to find the closest Registration Service Center to you.

*Typically, Registration Centers are within businesses like insurance agencies, that can provide DMV services as well as others.

Repossess / Repo – When a borrower defaults on the auto title loan and doesn’t intend to pay back the debt. An auto finance firm would take back the vehicle if a customer does not meet legal financial obligations.

Retail Value – The dealer’s average selling price of a car is its retail value.

The retail value can be the dollar amount it would take to replace your vehicle if it is stolen or written off after an accident.

If your vehicle is a total wreck or gone missing, your payoff will be highest if your car was insured for its retail value.

S

Salvage Title – A type of branding for vehicles that notes when a vehicle was damaged or called total loss by the insurance company that paid its claim.

Each state has different rules for determining when the title is salvaged.

Secured Loans – Secured loans are those where the borrower promises an asset, such as a car, to hold as collateral. The loan is called a secured debt, which must be paid to the creditor.

Collateral secures the debt but if the customer defaults, the creditor gets to take the asset that was given as collateral. It can be sold to cover the debt.

T

Term Length – The term is how much time there is from the beginning to the end of a loan.

Third Party Payoff – If your car has a lien on it, our company can possibly help you with a new loan by paying the third party loan off for you. You would get some cash if you are approved.

Title – Usually referred to as a car title, a vehicle title is a type of legal document that establishes ownership of a vehicle to a business or person.

Title Loan – A loan using equity you have in your vehicle so you can borrow cash.

The lender will hang on to the title until payment of the auto equity loan, but you can keep your car and drive it.

Trade-in Value – A used vehicle’s value when you trade it in to a dealer as part of buying a different car.

Disclaimer: Title Loan Glossary of Terms:   Terminology Glossary for Title Loans:

• These terms and definitions will give you the simple definition for phrases or words you will come across on our company web site.
• The phrase or term’s meaning depends on how and where it’s used, since documents, agreements you will sign, customer disclosures, industry usage and our internal program policy manuals have specific meanings in each particular context.
• Definitions and terms do not have a binding effect for the purpose of other transactions or contracts related to us.