The Pros and Cons of Auto Title Loans

Le pour et le contre des prêts sur titre automobile

When people need a little extra cash, one of the best ways to do so is to take out a title loan using their own vehicle's collateral. Instead of looking at the whole picture and terms, many people rush into this type of loan without really knowing what they are getting into. These loans can be very attractive if the borrower has the means to make the payments and repay the entire loan amount on time, avoiding any penalties.

The advantages of title loans

There are many benefits to taking out a title loan. Such a loan allows you to get money quickly and easily, which is the main reason why people tend to resort to it. The whole process only takes about 15 minutes, and the chances of being refused are very low. As long as you have a title to your vehicle, the money is yours.

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

Finally, the borrower will be able to keep their vehicle for the duration of the loan. However, if the money is not repaid, the lender has the right to repossess the vehicle. This only happens after a certain time. The companies have different, but similar terms of agreement.

Disadvantages of title loans

The disadvantages may outweigh the advantages. One of the main disadvantages is the high interest rate. This is probably the main reason why it is so easy to get one of these loans. Sometimes these interest rates can get so ridiculous that they reach triple digit numbers. There are only a few states in this country that have laws to control them, but that's unfortunate.

Again, this can also lead to repossession of the borrower's vehicle if the loan is not repaid in full. This can also lead to many other consequences. The company may also charge the most outrageous fees just to increase the amount borrowed. Sometimes it's not worth it in the end. People who are in desperate need of money should only use this option as a last resort.


Before obtaining a title loan, you must make sure you know a certain number of things, including the annual interest rate. You should also make sure you are aware of any other fees the lender may charge before applying for a loan. Paying the loan on time, on or before the specific due date, will make a huge difference. Try to avoid any late or missed payments. Again, this solution should only be used as a last resort. Consider borrowing from family or friends before attempting to take out a title loan. You should also consider finding a second job in order to increase your income and thus avoid having to take out loans. Despite the risks applicants face when taking out a title loan, it has become a convenient option for consumers, especially in the event of a financial emergency. Before applying for a loan, be sure to carefully analyze the lenders in your area as well as the procedure in your state. For example, to apply for a loan, you must be at least 18 years old and a resident of the state.