What is a Car Title Loan?

Car Title Loan  is a short-term cash loan secured by your vehicle’s equity. The lender will examine your vehicle to determine its value and you will receive a loan amount between 25% and 50% of that value.

The loan term is short, generally 15-30 days, and you have to pay back the loan plus interest charges by then. The lender also has the right to repossess your vehicle if you fail to repay the loan. Some states have laws in place that protect borrowers from this type of predatory lending, and some have banned these types of loans altogether.

A Car Title Loan is a dangerous financial option

While this type of financing can offer quick access to cash, you should consider alternatives that are less risky and more cost-effective. These may include alternative payday loans, personal loans from credit unions or community development finance organizations, credit cards for people with bad credit, and borrowing money from family or friends. The lender will need to inspect your vehicle to make sure it is free and clear of any liens or debts. In some cases, lenders will require you to install a GPS device in your vehicle or provide a copy of your driver’s license. The lender will likely perform a credit check and evaluate your income to make a decision. The process typically takes a few minutes and the funds can be available in as little as one business day.

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