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Car title loans

Borrow funds using your vehicle as collateral.

Name Product Loan Interest Rate Max. Loan Amount Loan Term Requirements
Loans Canada Vehicle Title Loan
Loans Canada Vehicle Title Loan
0% to 29.99%
3 - 96 months
Requirements: min. income $1,800/month, 3+ months employed, min. credit score 300
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Auto title loans are loans taken out against the title of your car, giving you access to as much as 50% of the value of your car in funding. Our guide below explains how an auto title loan works, the features and eligibility criteria you’ll need to consider when you apply, and the pros and cons.

How do car title loans work?

Auto title loans are loans secured to the title of your vehicle. You can still drive your car while you’re repaying the loan, but your car is used as collateral. If you don’t make regular payments on your auto title loan, your vehicle can be repossessed and sold. You will generally have a few months to a few years to repay your auto title loan.

Lenders that provide auto title loans usually require that you own your vehicle outright. If you’re leasing your car or still making payments on it, you may have a harder time finding a lender.

After you apply, you may have to take your vehicle to a physical location to get it appraised. You’ll usually be offered 25% to 50% of the value of the car, and you’ll have to start making payments based on the schedule in your loan contract.

Is a vehicle title loan right for me?

A vehicle title loan might be a high-cost financing option, but it can benefit specific situations, such as the following:

  • When you need money fast. Vehicle title loans can get you funds in as little as 30 minutes. The only other type of loan with that kind of turnaround is a payday loan, which tends to come in smaller amounts and very high APRs.
  • When you have poor credit. Vehicle title loan providers typically accept all credit types. Some might not even check your credit when you apply.
  • When you need a larger loan. Vehicle title loans can sometimes run as high as $50,000, depending on the value of your vehicle and where you live.

How much do vehicle title loans give?

You’ll usually be offered 25% to 50% of the value of the car in financing, up to as much as $50,000. After you apply for a title loan, you may have to take your vehicle to a physical location to get it appraised so your lender has a clear idea of its market value.

What rate can I expect on a car title loan?

Interest on a title loan is typically from 20% to 30%, excluding other fees. Your rate typically depends on your loan amount, your term, the value of your vehicle and where you live, rather than on your personal credit rating.

Title loan APR vs interest rate

The interest rate actually isn’t the most important number to consider when weighing the cost of a vehicle title loan. Instead, you’ll want to look at its APR – or annual percentage rate.

The APR is how much you’d pay in interest and fees over one year, expressed as a percentage. Looking at the APR rather than the interest rate makes it easier to compare loan offers of similar amounts and terms. Tread carefully – APRs for vehicle title loans can often be in the triple digits.

Additional car title loan costs to consider

Title loan providers might charge other fees associated with taking out and repaying the loan, including the following:

  • Vehicle evaluation fee. This determines the value of your car.
  • Title search fee. A title search verifies that there aren’t any liens on your car.
  • Search fee. Shows if your car has been in any accidents.
  • Administration fees. The lender charges this to set up your account.
  • Roll-over fee. This is charged if you extend your loan term.
  • Registration fee. The lender charges this to put a lien on your car.
  • Installation fee. If applicable, this is charged to install a GPS tracker on your car.

Not all lenders advertise rates and fees online, especially if they aren’t legally required to do so. You might have to call ahead or visit a storefront in person to learn the costs you can expect.

How to get a vehicle title loan

Applications can be submitted online or in person at a store. Keep in mind, if you apply online, you will still have to bring your title and car in for an inspection. Whichever route you choose, simply follow these steps:

  1. Compare lenders. Look at features like APRs, how much you can borrow, where it’s located and eligibility requirements to find a lender that’s right for you.
  2. Fill out the application. Once you’ve narrowed down your search, proceed with the application. Typically, you’ll need your car’s make, model and condition as well as your contact information and your employment and income details. You can often complete this step online.
  3. Bring your title and vehicle for appraisal and inspection. Lenders like to check your vehicle to make sure it’s up to standards. Your lender will also check your car title to make sure it’s in your name and that you own the vehicle free and clear.
  4. Submit your documents. Title loan providers generally ask for documents to verify your income, residence and identity.
  5. Sign your loan documents. Read the terms and conditions before signing off on your loan.
  6. Collect your funds. You can usually get your money in cash within 30 minutes of arriving at the store.

Eligibility requirements for car title loans

Before you apply, make sure you meet the lender’s eligibility requirements and have the necessary documentation to verify these details. While the criteria differ from lender to lender, you’ll likely need to meet these requirements to qualify:

Benefits of auto title loans

  • Receive your funds quickly. If you apply in person at a physical location, you can generally receive your approved funds almost as soon as you accept the loan’s contract. With online applications, lenders can transfer funds into your bank account by the next business day.
  • Bad credit is OK. Since you’re providing collateral in the form of your vehicle’s title, you don’t have to have a good credit score. Lenders will be willing to lend to you because of the secure nature of the auto title loan.

Drawbacks of auto title loans

  • Possibility of losing your car. If you aren’t able to pay back your initial loan plus the interest it accrues, the lender has the right to repossess your vehicle.
  • High cost. With the interest rate and other fees, the APR can be in the triple digits.
  • Disreputable lenders. Not all lenders are equally reputable and trustworthy. Compare different lenders in order to find the best deal. If you wind up choosing a dishonest lender and end up paying unaffordable interest rates, it can put you at risk of losing your car.

    How to compare vehicle title loans

    Consider these factors when you’re comparing auto title loans:

    Watch out for lenders with few requirements

    Loans that sound too good to be true often are. If a car title loan provider advertises how easy it is to qualify for a loan, it could be a sign of a predatory lender – especially if it “guarantees” approval.

    Minimal requirements could be a sign of the following:

    • High rates. Lenders that don’t check your credit or income often assume the worst and can charge higher rates than others.
    • Unnecessary add-ons. Others might use it as an excuse to include products you don’t need like extra insurance to inflate the price of your loan without increasing the APR.
    • Bait-and-switch schemes. Advertising car title loans with low requirements might also be a tactic to sell you another loan with less favourable rates and terms.

    Generally, you’re better off working with a lender that has more requirements, even if you have poor credit or low income.

    Can I apply for a title loan with other vehicles?

    If you own other vehicles, such as a motorcycle, truck, boat or recreational vehicle (RV), you can also apply for vehicle title loans using these assets to back your loan. They’ll work in the same way – you can take out a loan using your vehicle’s title as collateral and you can still drive your vehicle while you’re paying off your loan.

    You may find a few key differences between traditional auto title loans and title loans with these vehicles:

    • Larger amounts are available. Boats, yachts, trucks and RVs usually have a higher resale value than a car. Because of this price disparity, you might be able to secure a larger loan.
    • Longer terms tend to come with larger amounts. Some boat title loans offer terms of up to 42 months, while auto title loans tend to max out at 36 months.
    • It takes longer to get appraised. Earmark extra time for an appraisal if you’re applying for a title loan with your boat, yacht, truck or RV. This is because getting these vehicles inspected and appraised may be harder to do than driving your car to the lender or inspection centre.

    Alternatives to car title loans

    Don’t think you can qualify for a vehicle title loan? You might want to look into these alternatives instead:

    • Payday loans. If you just need a few hundred dollars or less as soon as possible, a payday loan might be able to help. You don’t need good credit to qualify, though APRs can easily top 700%.
    • Installment loans. You might want to consider installment loans if you need to borrow between $500 and $10,000 and have poor credit. This is also an expensive option.
    • Local resources. Are you often resorting to short-term loans to make ends meet? You might qualify for a government program to help with basic living expenses.

    Frequently asked questions

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