Compare short-term loans secured by your car title.
Our top pick: Max Cash Title Loans
With a quick online application, Max Cash could help connect you with a lender, finding you options in minutes.
- Max. Loan Amount: $50,000
- Loan Term: Varies by lender
- Turnaround Time: As little as 1 business day
- No bank account requirement.
- Not available in 12 states: CO, CT, DC, HI, MT, NE, NJ, NY, OR, SC, SD or WY.
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How do auto title loans work?
Auto title loans, also called title pawns, are loans secured to the title of your vehicle. In most cases, you’ll need to have a lien-free title in order to qualify.
After you apply, you may have to take your vehicle to a physical location to have it appraised. A lender may offer you between 25-50% the value of the car as a loan, and you can keep driving your car during the loan period. Once your contract is signed, you’ll start making payments based on the schedule you agreed to in your loan contract.
Unlike an unsecured payday loan, if you don’t make regular payments on your auto title loan, your vehicle can be repossessed and sold. That’s why many states highly regulate the auto title loan industry, and some states have even made them illegal.
Compare auto title loans
What you can expect from an auto title loan
No matter where you live, auto title loans generally have similar features that you can compare when making your decision.
- APR. APR represents the total cost of your loan, including both interest and fees. Even a small change can have a big impact on the overall cost of the loan, so be on the lookout for lower rates and fewer fees to keep your loan cheap.
- Loan amount. The amount you can borrow depends on how much your car is appraised for and the maximum loan amount set by the lender. Generally, you can borrow 25-50% of the appraised value of your vehicle.
- Loan term. Loan terms differ between providers and states, but many states set the initial loan term limit at 30 days with options to renew or rollover your loan amount.
- Payment flexibility. Most lenders offer some form of payment flexibility to match your pay schedule, whether it’s weekly, biweekly or monthly.
- Extra payments. Find a lender that allows you to make an extra payment without fees so you can save on interest. If you can’t, opt for a lender with the lowest early repayment fee.
What you should avoid
- Add-ons. Lenders may offer add-ons to bump up the cost of your loan, and some may even require that you agree to an add-on in order to get the loan. Try to find a lender that doesn’t force your hand to make an extra buck as you’ll likely find a better deal elsewhere.
- Taking on a loan you can’t afford. Although many people use auto title loans in a time of crisis, it’s important to know what you can afford. If you won’t be able to pay back your loan, you risk worse debt and the loss of your vehicle.
- Refinancing. If you can’t pay off your loan in the original term set out in your contract, the lender may allow you refinance or roll over your loan. You’ll be charged additional fees and interest on top of your existing fees, and this can quickly get expensive.
- Skimming the loan offer document. Make sure you go through the terms and conditions of your loan carefully. This should give you a clear indication of how much the loan will end up costing. If you don’t agree to the terms, you are under no obligation to accept the loan.
Benefits and drawbacks to consider
- Receive your loan quickly. If you apply at a physical location, you may be able to receive your loan funds the same day. With online applications, lenders can transfer funds into your bank account by the next business day.
- Better rates. Auto title loans tend to offer lower interest rates when compared to other short-term lending options like payday loans or installment loans.
- 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 more willing to lend to you because of the secure nature of the loan.
- Risk losing your car. If you aren’t able to pay back your loan, the lender has the right to repossess your vehicle. This could leave you in a much worse financial situation.
- High cost. Title loans are costly when compared to more traditional forms of credit. Consider if you can afford the repayments before taking out a loan.
- Disreputable lenders. Not all lenders are licensed to operate a loan business in your state. This means they won’t be following regulations and could be working illegally, which puts you at risk of losing your car because of incredibly high interest rates.
Alternatives to auto title loans
Not everyone has the ability to take out a car loan, and the risk of losing your vehicle may not appeal to you. If that’s the case, consider these alternatives when you need emergency money.
- Payday loans. Payday loans require no security. You won’t risk losing your car, and in many states, the cost may be similar to that of an auto title loan.
- Installment loans. Installment loans are another type of short-term loan, but instead of being due in one lump sum, you have the ability to pay in monthly installments.
- Short-term loan alternatives. If you’re not in a position to borrow money, these alternatives to short-term loans could help you avoid taking on more debt.
Auto title loans for military personnel
Servicemembers and their dependents are protected under special provisions of federal law and a Department of Defense ruling. These provisions relate to payday loans, tax refund anticipation loans and vehicle title loans. According to these provisions, the military APR for car title loans cannot exceed 36%. This applies to all title loans with terms of less than 181 days.
How to apply for an auto title loan
- Own your car outright
- Have steady source of income income
- Be at least 18 years old (varies by state)
- Be a US citizen or permanent resident
How to apply
With most lenders, applications can be submitted online or in person.
- Visit a lender’s storefront or its online website
- Provide your name, date of birth, address and email address
- Provide your state-issued ID
- Give details about your employment status and income
- Have your vehicle appraised
If you apply online, your may need to bring your vehicle to a lender’s storefront in order to have it appraised before you can be approved.
Auto title loans can be a valuable tool when you find yourself faced with an unexpected bill or major expense that your budget simply can’t handle. Although expensive, planning for them and only borrowing as much as you need can help you clear the hurdle between paydays and avoid long-term debt.