Editor's choice: Max Cash Title Loans
- No bank account required
- No prepayment penalty
- Bad credit OK
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A title loan is a type of emergency financing that uses your car’s title as collateral. You can get your money in as little as 30 minutes and continue driving your car while paying it back.
But be well aware that it comes with high rates and you risk losing your car or getting caught in a cycle of debt if you can’t afford repayments.
A title loan is a short-term loan that uses your car’s title as collateral. You can still drive your car around while paying it off, but your lender can repossess it if you don’t pay your loan back on time.
There are two types of title loans:
Title loans are also known as car title loans, auto title loans or title pawn loans.
Some lenders also refer to title loans as pink slip loans, referring to the pink color of car titles in some states.
Title loans aren’t available in every state — though you might still be able to get one through a legal loophole. Contact the lender you’re interested in or select your state in our comparison table to see which loans are available to you.
Typically, you can borrow up to $10,000 depending on the value of your car, your ability to repay and your state’s laws. Some lenders only offer up to $2,500, while others can get you as much as $50,000.
When inspecting your car, lenders consider factors like its year, make, model, mileage and general wear and tear. Your income and current debts can also affect how much you can borrow.
Title loans are one of the more expensive loans out there. On single-payment loans, lenders often charge a fee per $100 borrowed. For installment loans, lenders typically charge both interest and fees.
This can make them hard to compare unless you look at the annual percentage rate (APR). An APR is how much interest and fees you’d pay in one year as a percentage of the loan amount.
It’s common for lenders to charge an APR of 300% on a title loan.
Title loans are expensive and best left for emergencies — if they’re even legal in your state. You might want to consider a title loan if:
It’s illegal for a lender to give you a title loan if you’re a servicemember, reservist or a dependent, thanks to the Military Lending Act (MLA). You also might have trouble getting other types of short-term loans, since the MLA has restrictions on rates and fees that lenders can charge.
Consider looking into your other loan options and financial assistance programs.
Aside from the high APR, title loans come with several risks. You could:
A recent Consumer Financial Protection Bureau (CFPB) survey found that people who take out a single-payment title loan are at high risk of starting a cycle of debt.
The most common way to get a car title loan is in person at a store. While you might be able to apply online, in most cases you still have to bring in your car and title for inspection. This can be a good thing — it’s harder for a brick-and-mortar lender to break the law than an online lender.
In the rare case that you can find a title loan entirely online, you’ll likely need to submit more documents. And it can take at least one business day to get the loan.
No, you must have a clear title to get a title loan. This means that you can’t be using it as collateral for another loan — including your original auto loan. If you don’t have a clear title, you might want to look into auto equity loans instead.
Title loans are meant as a last resort. And even then, they might not be right for you. Instead, here are some other options:
If you have a single-payment title loan, you have to pay back your loan in 30 days. Title installment loans come with multiple monthly repayments.
Usually, you can make payments online through the lender’s website, though many title loan providers also accept cash, money orders, wire transfers or cashier’s checks.
It depends on where you live. If you live in a state that regulates title loans, you might expect your lender to take the following steps:
Extending your loan involves adding 30 more days to a single-payment title loan. Often when you extend your loan, you have to pay an extra fee either upfront or wrapped into your loan balance.
Many states limit how often you can extend a title loan. Some ban it outright. That’s because extending a loan even once doubles the cost of your title loan and makes it even harder to pay it back. It’s generally best saved for absolute emergencies.
A title loan buyout works like refinancing: You take out another loan to pay off your title loan, ideally with more favorable rates and terms.
It’s another way to extend your loan without rolling it over. But like rolling over your loan, you could end up paying more in the long run.
Auto title loans are one option if you need money today and don’t have strong personal finances. But they’re expensive and come with a high rate of default, meaning you could lose your car if you can’t afford repayments.
Check out our guide to short-term loans to learn about even more options for fast cash when you have bad credit.
Just don’t expect to know what rates and terms you might qualify for until after you fill out its online form.
The answer isn’t as cut and dry as you might think.
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Plus other fees you might be on the hook for.
What you need to know before putting your pink slip up as collateral on a short-term loan.
Are you eligible for a short-term loan backed by your vehicle?
How title loans work when you apply completely online and find out if it’s worth it.
Borrow up to $25,000 — but only if you live in one of the 21 states it services.
This lender offers competitive rates for your car, motorcycle or RV title. But watch for negative online complaints.
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