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Car Title Loans Explained: Frequently Asked Questions


What is a car title loan?

A car title loan is essentially a collateral loan, giving everyone – even those without picture-perfect credit – the opportunity to get financing for expenses such as rent, medical bills, car repair, and more using their car’s title.

These kinds of loans can put anywhere between $500 and $15,000 or more cash in the hands of those that wouldn’t have been able to take a loan out otherwise. Because they use valuable collateral to secure the loan, most everyone is eligible and will be approved after the short application process has concluded.

What are the benefits of a title loan?

There are a number of big benefits individuals will be able to leverage when they take advantage of car title loans.

Right out of the gate, you’re going to be able to guarantee yourself a shot at a loan of anywhere between $500 and $15,000 (and potentially more) – depending entirely upon the actual value of your vehicle. This gives you the opportunity to get cash immediately without having to go through a long, drawn out, and sometimes risky traditional loan process.

Another benefit is that you are going to be able to continue driving your vehicle and using the vehicle that you have put up as collateral the same way you were before you move forward with a car title loan. No one will come and take your vehicle after you put it up, no one’s going to tell you how to use your vehicle, and you’ll still be able to take advantage of the loan even if you put 1000 miles – or more – on your car over the life of that loan.

The almost instant payout of these title loans is one of the bigger benefits you will enjoy. After you are approved for this kind of loan you’ll be able to take advantage of that cash almost immediately. Cash will be offered to you if you are approved in person, but you’ll also have the opportunity to receive a direct deposit within 24 hours after approval, as well.

What are the disadvantages of a title loan?

There are some downsides to these kinds of loans that are important to highlight as well.

For starters, the interest rates associated with car title loans are similar to all other collateral loans in that they can be a little bit higher than more traditional lending opportunities.

Secondly, you always run the risk of not making payments in the future and having your vehicle repossessed by the individuals that you put up your title as collateral with.

Thirdly, you need to make sure that you are always working with reputable and reliable car title loan companies. You want to be sure that you can trust the individuals you’re working with to help you out and not dabble with sky-high interest rates, unreasonable repayment terms, or any other hidden tricks to separate you from your vehicle – and your money – moving forward.

It’s not a bad idea to look for companies that will report positively on your credit score as well. Not all of them have this service, but it can be a good opportunity to help you rebuild your credit moving forward.

How do I apply for a title loan online?

The title loan application process online is relatively simple and straightforward. You’ll need to find a company that offers online title loans and provide important details about yourself and the vehicle you are putting up as collateral. Then you’ll need to provide information, documentation, and potentially photographs that can confirm the information you have used on your online application to be true.

Most application processes are simple enough to be finished in five minutes and some lenders even have physical locations you can go to in an effort to speed things up even more so.

Are auto title loans online safe?

As long as you are always working with reliable, reputable, and trustworthy title loan lender, you shouldn’t have anything to worry about.

The short-term loan industry is unregulated (or at least not regulated the way that traditional lending industries are) so there’s always going to be a bit of risk associated with this kind of opportunity. At the same time, so long as you pay close attention to the reviews, testimonials, and track record that car title loan companies have accumulated over time – and choose to only move forward with the most reliable, the most reputable, and the most trustworthy operations in the business – you shouldn’t have anything to worry about.

Verify that the lender you are thinking about moving forward with uses full encryption, SSL technology, and security features that protect your personal, private, and payment information as well.

How are interest rates and fees calculated for a title loan?

The interest rates and fees that are going to be associated with your title loan are going to be unique and calculated based off of a variety of different factors, including (but not limited to):

  • The actual value of the vehicle that you are putting up as collateral
  • The actual value of the title loan that you are taking out
  • The repayment terms and duration that you have agreed to with a car title loan operation

… And a handful of other factors that will always be disclosed to you – verbally as well as in writing, down on your title loan terms sheet and contract.

It is important that you review all of this information before you sign on the dotted line and choose to move forward with any lender. Make sure you understand all of the financial details surrounding your title loan before you agree to anything, and certainly before you accept any money or put your title off as collateral.

Are title loans legal?

Absolutely! As we highlighted above, there are many car title loan companies operating online and locally. These lenders are ready to give you and millions of others the chance to get back on your financial footing and to take advantage of financial opportunities that you might not have been able to otherwise without a title loan.

Sure, the short-term lending industry is quite a bit different than the traditional lending industry, but by eliminating a lot of that regulation and red tape of these nontraditional lenders – lenders, in specific – are able to offer their loans to individuals that simply would have been able to get a loan any other way.

These kinds of agreements are 100% legal (in certain states), safe as long as you are only ever working with legitimate professionals, and can help you to improve your financial standing and gain almost instant access to capital without any headache or hassle moving forward!
However, do keep in mind that these types of loans are not available in states like New York, Iowa, Michigan and more. Please review your state’s regulations to make sure you are in compliance if you choose to apply for a title loan.

How can I find the best car title loans near me?

The internet is going to be your best friend when it comes time to search for top-tier car title loan opportunities. Obviously, you’ll want to utilize Google as much as possible (as well as the other search engine networks you are comfortable with), but you’ll also want to make sure that you are reviewing local opportunities by firing up Google Maps or a similar service to find the physical operations in your area offering these kinds of services.

What is the difference between a title loan and pawn?

All of these loans offer similar bottom-line results, but they have a handful of differences that separate them from each other as well.

A car title loan simply puts the title of your vehicle off as collateral, never forcing you to hand over ownership of your vehicle or compelling you to drive according to certain rules and regulations handed down by your lender.

Title pawn opportunities are financed directly through pawn shops, almost always come with a handful of strings attached, are incredibly short term and usually feature sky-high interest rates, and may result in your vehicle being sold out from underneath you sooner rather than later.

Auto equity loans are offered to those that have equity built up in their vehicle the same way that home equity loans are offered to individuals that own property with equity. These kinds of loans are almost always complex, convoluted, and difficult to navigate – and usually do not offer the same kind of capital that car title loan opportunities can.

Can I get a title loan if I’m unemployed?

One of the biggest benefits of a title loan is that everyone with a car title in hand can take advantage of a loan by putting up that title as collateral, regardless of any other financial details or situations you might find yourself in.

Whereas payday loan individuals aren’t going to be able to take advantage of a payday loan service if you do not have a provable income on a regular basis. In contrast, some title lenders do not require proof at all. As long as you have your title in hand the loan that you are pursuing will be based off of that collateral and that collateral alone. Everything else is basically irrelevant.

How much can I get for a title loan on my car?

It’s impossible to tell you exactly how much money you are going to be able to get for a title loan with your vehicle without knowing:

  • The make, model, year, and condition of the vehicle you are using as collateral
  • Your repayment terms and interest rates
  • The specific company that you are moving forward with for your loan

As a general rule, however, you should be able to anticipate receiving anywhere between $500 and $15,000 for the title loan you are taking advantage of. Sometimes you’ll be able to get even a bit more for the title that you are putting up as collateral. To get an idea of how much you’ll receive, get the trade-in value of your vehicle from KBB or BlackBook and multiply that value by 0.5.

Can I get a title loan if I filed for bankruptcy?

Absolutely! As we highlighted above, you should have absolutely no trouble whatsoever taking advantage of a car title loan even if you have filed for bankruptcy – no matter how far in the past or how reason that bankruptcy filing may have been.

The value of the vehicle you have a title in hand for is going to be the main determining factor for whether or not you are able to receive a title loan for the amount that you are looking for. The overwhelming majority of individuals are looking for a title loan have absolutely zero trouble whatsoever receiving a loan for the amount of money they are after because of this fact!

Can I get a title loan if I filed for bankruptcy?

Car title loans are only ever going to affect your credit in a positive way, and that’s only if the company you are working with agrees to add your loan agreement to your credit score, has the capacity to do so, and is going to regularly report to all of the major credit bureaus with each and every successful payment you make.

In most cases, you don’t need to worry about these kinds of loans negatively impacting your credit, another big advantage they have over more traditional lending opportunities.

Can I get a title loan if I filed for bankruptcy?

Getting a title loan using a car that is currently being financed is very, very difficult – if not flat-out impossible. The purpose of title loans is to provide financing to subprime borrowers that own their car. Without the title, the collateral, title loans would be like any other traditional loan.

You’ll have the easiest time getting access to the cash and capital you need when you put up a title to a vehicle that you own right, a title that you and you alone have access to, and a title that you can secure all on your own.

Fortunately, there are some companies that are willing to place a second lien on your title. However, the overwhelming majority of lenders are going to require you to move forward with an auto equity loan instead – with all of the disadvantages that it brings to the table.

Who are some of the best direct lenders of Title Loans?

There are a number of different companies out there offering reliable, safe, and high quality car title loans. The best options will:

  • Have a track record for fair dealings and successful interactions with their customers that stretches back a handful of years
  • Have a policy of total transparency when it comes to repayment rules, regulations, interest rates, and fees
  • Work with you directly to guarantee that you gain access to the capital you need as quickly as possible with as little hassle and headache along the way
  • Work with you to get yourself back on secure financial footings moving forward without risking your short or long-term financial future