What are Car Title Loans?

Car title loans are short-term lending instruments available to people regardless of their credit standing. This type of loan uses a paid off car title as its collateral. Title loans can provide funding when it is needed the most, but there are pros and cons that can go along with the prospect.

The Advantages Of Car Title Loans

Car title loans are generally offered by private lending companies and can carry some potential advantages. They include:

  • A lack of a credit check
  • Cursory review of income to cover the loan
  • Fast approval; in many cases same-day funding

The Cons Of Car Title Loans

Title loans can provide money when it is needed the most, but there are potential pitfalls. This type of loan generally has a high interest rate attached and the term is typically very short. It is not uncommon for car title loans to have a 30-day repayment period. If car title loans are not repaid as agreed, the collateral - a person's car - can legally be seized for payment.

Need an Auto Loan? Get a Free Quote Here!