You can get cash in under 30 minutes, but it’ll cost you.
But consider leaving this short-term loan option as a last resort. Triple-digit APRs are the norm and you could lose your car if you default.
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- No bank account required
- No prepayment penalty
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- Max. Loan Amount: $50,000
- Turnaround Time: 1 business day
- Loan Term: Varies by lender
- Requirements: Must be a US citizen or permanent resident, 18 or older with a regular source of income.
How do title pawn loans work?
Title pawn loans work a lot like title loans. They’re both short-term loans that use your vehicle’s title as collateral. This means that you can continue driving your car while you’re repaying the loan. Lenders that offer both might have fewer eligibility requirements for a title pawn loan, though most treat it the same as a title loan.
Despite the name, you don’t need to go to a pawn shop to get this type of financing. Instead, you can apply online or in person with a title loan provider and get your funds in as little as 30 minutes. You can typically borrow up to $10,000, though it depends on your state, lender and the value of your car. In some states, you might not be able to borrow more than $2,500.
Usually, borrowers have 30 days to pay back the loan in one lump sum. Some lenders also offer title pawn installment loans, which spread the repayments out over several months.
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Title pawn loans vs. auto pawn loans
Title pawn loans and auto pawn loans might sound similar, but there is a slight difference between the two. With a title pawn loan, you can keep driving your vehicle while you’re paying it back. With an auto pawn loan, your lender keeps your vehicle while you pay it back.
Auto pawn loans also tend to have fewer requirements and could be a better option if you’re unemployed or don’t have a bank account. But you might want to avoid it if you don’t have other transportation options.
How much does a title pawn loan cost?
Title pawn loans are an expensive type of financing and commonly come with APRs between 100% and 300%. However, it often varies depending on your state — many set limits on how much your lender can charge in interest or fees.
- For single-payment title pawn loans, it’s more common for the lender to charge a fee, called a finance charge, rather than interest. This can vary depending on your loan amount and state — sometimes it can be as low as $15 per $100 borrowed. These are typically due in full within 30 days.
- For installment title pawn loans, lenders typically charge both interest and fees, which can add up over a term of three to six months. On top of the financing fee, you might have to cover the cost of filing a lien on your car’s title. This gives your lender the legal right to seize the vehicle if you fail to repay. The filing fee is set by your state and is typically included in the APR.
Can I roll over a title pawn loan?
It depends on your state, but usually you can roll over a title pawn loan. Also commonly known as an extension or renewal, rolling over your title loan involves adding more time to your loan term. Typically, you can extend your term by 30 days at a time. Some states might have limits to how often you can roll over your title pawn loan.
Rolling over your loan should be a last resort. Extending it just once doubles the cost of your loan — at the very least. The same rates and fees from your original loan often apply, and some lenders might charge a rollover fee.
What happens if I don’t repay my title pawn loan on time?
You could lose your car if you don’t repay your title pawn loan on time. However, that might not happen right away. Miss a payment by a few days and you might only have to pay a late fee. If you miss your repayment by longer, your lender might offer to extend your term to collect repayment.
Otherwise, it will take the steps to repossess and sell your car to cover the cost of your loan. Your lender could also take funds to cover the costs associated with repossessing and selling your car. After your lender collects the funds, it’s typically required to give you any remaining profits from the sale.
What states allow title pawn loans?
Title loans aren’t legal in every state. And even where they are legal, the state often has regulations on how much you can borrow, interest rates, fees and terms. Many states also have rules that regulate when and how your lender can repossess your vehicle if you fail to pay back your loan.
Since states typically treat title pawn loans and title loans as the same thing, check out our title loans guide to find out if they’re available where you live.
Benefits and drawbacks of title pawn loans
While title pawn loans can be helpful when you need cash fast, they’re not without risk.
Benefits
- Open to all credit types. You don’t need excellent credit to get this type of loan.
- Fast cash. You can sometimes get your money within 30 minutes if you apply in person.
- No bank account options. Some lenders might not even require you to have a checking or savings account to get a title pawn loan.
- Keep your car. You can continue to drive your car while you pay off your title pawn loan.
Drawbacks
- Expensive repayments. Triple-digit APRs are the norm for title pawn loans.
- State restrictions. Depending on where you live, you might not even be able to get a title loan.
- Could lose your car. Your lender is legally allowed to repossess and sell your car if you can’t repay your title pawn loan.
- Risk falling into cycle of debt. Many lenders allow you to roll over your title pawn loan, which adds to the cost each time and makes it more difficult to pay off.
How do I apply for a title pawn loan?
Most title pawn lenders allow you to apply online or in person at a storefront. But even if you get approved online, you’ll likely need to visit a store to have your car inspected and finalize the application.
While it’s possible to get a title pawn loan entirely online, it’s rare. It’s also not as fast. You might have to submit additional documents, and you’ll often have to wait 24 hours for a wire transfer.
Eligibility requirements
Eligibility requirements vary by lender, but typically you must:
- Have a lien-free car title.
- Live in a state where tile loans are legal.
- Have a state-issued driver’s license.
- Have a regular source of income.
- Be a US citizen or permanent resident.
- Be over 18 years old.
Steps to apply online
Looking to begin the application process online? Follow these steps:
- Visit the lender’s website and complete the online application.
- Wait for a response from your lender. If you’re approved, follow the directions to visit the storefront. Typically, you’ll need to bring a copy of your driver’s license, your car title and your car. Some might also require an extra key.
- Follow your lender’s instructions for submitting the documents and wait for a representative to inspect your car.
- Review your final offer and sign the loan documents.
- Collect your cash and drive home in your car.
Alternatives to title pawn loans
Concerned about how expensive title pawn loans are? Consider one of these alternatives:
- Payday alternative loan. Some federal credit unions offer short-term loans between $200 and $1,000 with APRs capped at 28%.
- Credit card cash advance. Though you still have to pay a fee as well as interest, taking out a cash advance with your credit card is typically a less expensive option.
- Borrow from friends or family. It’s never easy asking those close to you for money, but they may be willing to help you out until you’re on more solid financial ground.
Bottom line
Lenders often use the terms title pawn loan and title loan to mean the same thing. Both use your car title as collateral, rather than the vehicle itself, so you can still drive around while paying off your loan.
It’s one of the quickest types of financing out there, though with such high rates and the risk of losing your car, it’s best left to absolute emergencies.
To learn more about how short-term loans work, check out our payday loans guide.
Frequently asked questions
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