The Pros and Cons of Auto Title Loans

car-loanWhen people need a little extra cash, one of the best ways they do this is by taking out a car title loan using the collateral of their own vehicle. Instead of looking at the entire picture and terms, many people storm right into this type of loan not really knowing what they are getting themselves into. They can be really great if the borrower can afford to make the payments and pay the entire loan amount back on time, avoiding any penalties.

Pros of title loans

There are many great benefits that come along with taking out a title loan. A title loan definitely provides fast and easy cash, making this the number one reason why people tend to go for them. The entire process only takes about 15 minutes, and chances are very low of being turned down. As long as one has a title to their vehicle, the cash is theirs.

Another reason why people tend to go for title loans is because their credit will not be checked. In this case, having a low or high credit score really doesn’t matter. Everything is based off of the value of the vehicle. However, some companies will check the income source of the borrower, just to make sure they do have current income.

Last but not least, the borrower will be able to keep their vehicle while they take their loan out. However, if the money if not paid back, the lender has a right to come after the vehicle. This is only after a certain time has passed. Different companies have different, but similar terms of agreements.

Cons of title loans

The disadvantages may out due the advantages. One of the main disadvantages is the high interest rates. This is probably the number one reason why it is so easy to obtain one of these loans. Sometimes these interest rates can get so ridiculous as to reach three digit numbers. There are only a few states in this country that have laws to control it, but that is unfortunate.

Again, it may also lead to repossession of the borrower’s vehicle if the loan is not paid back in full. This can cause a lot more consequences as well. The company may also charge the most outrageous fees just to make the amount borrowed a lot more higher. Sometimes this may not be worth it in the end. People, who are in a desperate need for cash, should only use this option as a last resort.


Before obtaining a title loan, one should make sure that they make themselves aware of a few things, one being the APR. One needs to also make sure that they are familiar with any other fees that the lender may charge before applying for a title loan. Paying the loan on time on the specific due date, if not before, will make a huge difference. Try to avoid any late payments or missed payments. Again, this should be used as a last resort. Borrowing from family and or friends should be considered before attempting to take out a title loan. One should also consider getting a second job so that they can increase income, therefore avoiding the need to take out loans. Despite the risks that applicants face when taking title loans, they have become a convenient option for consumers especially in times of financial emergencies. Prior to applying for a title loan, make sure you carefully analyze the lenders in your area as well as the process in your state, for instance when applying for title loans, you must be at least 18 years old and reside within the state.

One Comment

  1. Levi Armstrong

    It’s good to know that filing for an auto loan is an easy process that only takes around 15 minutes, and you usually would not get turned down as long as you have the title to your car. A friend of mine desperately needs some money after his wife went into premature labor two weeks ago. The hospital bills have been piling up because his newly-born child has been staying in the NICU. I lent him some money, but it won’t be enough to cover all the bills. Perhaps I should suggest that he contact an auto loan lending services to help him out. Thanks for this.

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