Loans secured by a borrower’s vehicle title are also known as title pawns and car title loans. The vehicle’s title will be used as collateral until the loan can be repaid. You can also borrow against other vehicles, like trucks, RVs, and motorcycles.
These loans typically last for 30 days and can range from $1,000 to $30,000. They are taken out between 25% and 50% of a vehicle’s value.
The option of acquiring a title loan can be a viable resource for consumers who have exhausted all traditional and conventional loan options and require alternative financing. About 2 million Americans use such loans, and there are 7,700 licensed car title lenders in 21 states.
The average title loan has a triple-digit APR. For example, title lenders can charge an average of 25% interest per month, or about 300% APR. Typically, title loans are 25% to 50% of the total value of the car being financed, and loan amounts can be as high as $10,000 from some lenders. This high rate can lead to borrowers rolling over multiple loans and trapping them in an unsustainable debt cycle. These loans typically last for 30 days and can range from $1,000 to $30,000. They are taken out between 25% and 50% of a vehicle’s value. The option of acquiring a title loan can be a viable resource for consumers who have exhausted all traditional and conventional loan options and require alternative financing. About 2 million Americans use such loans, and there are 7,700 licensed car title lenders in 21 states. Compared with credit cards, these loans are advantageous because the APR is set in advance instead of having a variable interest rate that changes based on your situation as with credit cards. With this plan, you are able to predict your monthly payment each month and you don’t have to worry about variable interest rates.