What is a Title Loan?
A title loan is a way for you to obtain quick money by using the title of your car (or other type of motor vehicle) as collateral. The amount of the loan will be tied directly to the value of the vehicle you are using as collateral.
This process involves the lender putting a temporary lien on your vehicle title in exchange for the amount of money agreed upon for the loan. You will be required to provide a hard copy of the vehicle title to the lender. After the loan is repaid, the lien will be removed and the title of the vehicle will be returned to you.
A title loan is a generally a quick and easy way for you to obtain the money you need for unexpected or emergency expenses. However, this type of loan usually has a much higher interest rate than other common loans (such as a home loan or auto loan).
One of the main advantages of a title loan is that you usually don’t need to have good credit or show proof of employment or income. You simply need to have the title to a vehicle that you own. This makes a title loan a viable option for someone with credit challenges and/or a lack of steady income.
On the down side, you must be sure that you will have the ability to repay the title loan (with interest) within the time required. If you fail to do so, the lender will take possession of your vehicle.