Title loans, explained

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.

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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.

What do you want to do first?

• 
  Learn how it works
• 
  Get a title loan
• 
  Find alternatives
• 
  Learn about repayment

What is a title loan?

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:

• Single-pay title loan. Pay it back all at once, usually within 30 days. These are the most common.
• Installment title loan. Break your repayments into monthly installments, usually over three to 12 months — depending on your state.

Title loans are also known as car title loans, auto title loans or title pawn loans.

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Name	Product	Filter Values	Max. Loan Amount	Turnaround time	Requirements
Max Cash Title Loans			$50,000	Same business day to 1 business days	Must be a US citizen or permanent resident, 18 or older with a regular source of income.	With a quick online application, Max Cash could help connect you with a lender, finding you options in minutes.	Go to site More Info		loading Fetching your data...
AutoTitleLoans.com Car Title Loans			$10,000	Varies by lender	Have a regular source of income, not be involved in any bankruptcy proceedings, be a US citizen or permanent residence, be at least 18 years old (varies by state).	Quickly find a lender and potentially borrow up to $10,000 by using this auto title loan connection service.	Go to site More Info		loading Fetching your data...
LoanMart Car Title Loans			$50,000	1 business day	Must live in AL, AZ, IL, MO, NM, SC or UT. Must have verifiable income, car value of at least $1,500 and a vehicle that is paid-off or close to being paid-off.	A LoanMart auto title loan allows you to borrow money against your car, even if you have bad credit.	More Info		loading Fetching your data...
Finova Financial Auto Equity Loans			$5,000	as little as one business day	Must live in AZ, CA, FL, NM, SC or TN. Must own your car outright, have a valid car insurance policy and be a US citizen or permanent resident.	Short-term loans secured by your car title. Repayments accepted through MoneyGram if you don't have a bank account.	Go to site More Info		loading Fetching your data...

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Are title loans legal in my state?

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.

How much can I borrow?

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.

How much does a title loan cost?

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.

Is a title loan right for me?

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:

• You need money today. You can often get a title loan in just 30 minutes.
• You have bad or no credit. Most title lenders work with all credit types.
• You don’t have a bank account. Many title loan providers allow you to pick up your funds and repay your loan with cash or a money order.
• You’ve filed for bankruptcy. Some providers are willing to work with borrowers who have a bankruptcy on their credit report.
• You rely on welfare. You sometimes don’t need a job as long as you have regular income.

Risks of getting a title loan

Aside from the high APR, title loans come with several risks. You could:

• Lose your car. Your lender can repossess your car if you don’t repay your loan.
• Get caught in a cycle of debt. Most borrowers renew title loans at least once, increasing the loan cost and making it more difficult to pay off.
• Borrow from an illegal lender. State laws on short-term loans tend to change frequently. It can be hard to tell if your lender is acting legally.

The title loan cycle of debt

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.

Where can I get a car title loan?

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.

How to get a title loan in 6 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. Typically, you’ll need your car’s make, model and mileage, as well as your contact information and details on anyone else on your car title. You can often complete this step online.
3. Bring your vehicle for inspection. Lenders like to check your vehicle to make sure it’s up to standards. Some also install a GPS tracker to help them locate it if you default.
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.

Compare auto title loans

What do I need to get a title loan?

Generally, you need to provide:
• Your car’s title. You can’t be using your title as collateral for another loan. If someone else’s name is on the title, they usually must apply with you as a co-applicant.
• Your car. Your lender won’t keep your car, but it will need to inspect it first.
• Proof of income. Some lenders require you to be employed, while others accept borrowers on welfare or with a pension.
• State-issued ID. This helps your lender verify your identity and age.
• Proof of residence. You might have to provide a utility bill or copy of your lease or mortgage.
• Bank account information. Not all title lenders require you to have a bank account, but some might.

What to avoid when taking out a title loan

• Add-ons. Lenders sometimes offer — or even require — insurance and other unnecessary add-ons to bump up the cost of your loan.
• Borrowing more than you can afford. Avoid a cycle of debt by making sure you can comfortably afford all repayments before taking out a loan.
• Long loan terms. The longer you take to repay your title loan, the more you pay in interest or fees.
• Skimming your contract. This is where lenders can hide add-ons and get you to sign away your right to sue with an arbitration clause. Make sure you understand what you’re signing.

Title loan alternatives

Title loans are meant as a last resort. And even then, they might not be right for you. Instead, here are some other options:

• Consider local resources

  Most states have programs that will cover some of your food, medical or home costs. You won’t have to pay back any money you receive. But it can take a while to get approved.

• Ask friends or family

  Though it’s not the easiest conversation to have, your loved ones might be willing to help. You can even make your loan legally binding by drawing up a contract. The downside is you risk ruining your relationships if you can’t repay.

• Look into a payday alternative loan

  Some federal credit unions offer short-term loans from $200 to $1,000 with APRs capped at 28%. They’re much more affordable than a title loan, but you likely won’t be able to get your money as fast.

• Visit a CDFI

  A community development financial institution (CDFI) is a nonprofit lender that works to provide cost-effective financing to members of its community.

  They’re typically local banks or credit unions that offer affordable short-term loans to nearby residents. But like payday alternative loans, CDFI loans can take longer to fund and aren’t ideal for emergencies.

• Take out a cash advance

  If you have an emergency expense and a credit card, taking out a cash advance is often less expensive than a title loan.

  It’s still not cheap, though: You have to pay a fee and start paying interest right away. But you can get your money as fast as it takes you to find an ATM.

• Apply for an installment loan

  This type of short-term loan works a lot like a title installment loan. It still has a high APR and can be even more expensive than a payday loan in the long run. But you don’t have to leave your home to apply and won’t risk losing your car.

• Take out a payday loan

  Similar to a single-payment title loan, a payday loan is due two to four weeks after taking it out. You can get your money the same day if you visit a physical storefront, and you don’t risk losing your car if you can’t make repayments.

  But these short-term loans can come with APRs upwards of 700%, and you often can’t borrow more than $500 at a time.

How paying back a title loan works

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.

What happens if I don’t pay back a title loan?

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:

1. Offer the option to extend. Also known as renewing or rolling over your loan, this gives you another 30 days to pay back your loan. Though you might be charged a fee to extend it.
2. Offer a payment plan. If you still can’t repay, your lender might offer a more affordable payment plan before taking steps to repossess your car.
3. File a lawsuit. Your lender must file a legal claim on your car with a civil court before it can repossess it.
4. Repossess your car. Sometimes you’ll have a chance to drive your car to the lender and remove your belongings. Otherwise, they’ll come to your home and take it from you.
5. Sell your car. To collect on the money you owe, your lender sells your car in an auction. Some states require lenders to only keep funds that cover your loan and the cost of repossession. Others let them keep everything.

Title loan defaults by numbers

Should I extend my loan?

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.

Should I get a title loan buyout?

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.

Bottom line

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.

Frequently asked questions

• What if I have bad credit?

  Because the car acts as collateral, lenders usually won’t hold your credit history against you.

• What details do I have to provide to get an auto title loan?

  You’ll need to submit a clear title that shows you own the vehicle. The application will also require information about your employment, income and identity.

• What is a lien-free car title?

  This means your car has no outstanding loans or judgments against it and that you own your car outright, however some lenders may approve your if your car is almost paid off.

• Can you get a title loan for a motorcycle?

  Yes. Some lenders also offer motorcycle title loans.

• Does the car title have to be in my name to get an auto title loan?

  Yes. You will need to be the legal owner of the vehicle to get a car title loan.

• What if there are two names listed on my car title?

  Confirm with the lender whether you’ll need permission from the other person listed on the title or if you’ll need to get a joint car title loan.

• If I can’t repay, can I get out of a title loan without losing my car?

  Generally, no. The only way to get out of a title loan that you can’t repay is if your lender is accused of acting illegally and faces a class-action lawsuit. But even then, you’ll still likely lose your car and get refunded only if the court rules in your favor.

• Can I get a title loan without a job?

  It depends on the lender. Some accept any form of income as proof of your ability to repay, while others require you to be employed. Learn about more of your options by reading our article on loans you can get while you’re unemployed.

• Can I get a title loan without proof of income?

  It’s possible, but your options will be limited since many title lenders require a verified source of income.

• How can I stop a title loan repossession?

  If you’re able to pay off your balance in full right away before the lawsuit is over, you might be able to negotiate a deal with the lender. Otherwise, there’s little you can do once your lender is given a court order to repossess your car.

• Can I use my semi for a title loan?

  Yes, some providers specialize in title loans backed by semis and other large commercial vehicles. Learn more about how they work with our guide to truck title loans.

• Can I use my boat for a title loan?

  Yes, some title loan providers specialize in loans backed by your boat title. These tend to come with the same high rates as auto title loans, but in larger amounts and longer terms. Learn more with our guide to boat title loans.