Secured loan using borrower's vehicle title as collateral
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A title loan (also known as a car title loan) is a type of secured loan where borrowers can use their vehicle title as collateral.[1] Borrowers who get title loans must allow a lender to place a lien on their car title, and temporarily surrender the hard copy of their vehicle title, in exchange for a loan amount.[2] When the loan is repaid, the lien is removed and the car title is returned to its owner. If the borrower defaults on their payments then the lender is liable to repossess the vehicle and sell it to repay the borrowers’ outstanding debt.
These loans are typically short-term and tend to carry higher interest rates than other sources of credit. Lenders typically do not check the credit history of borrowers for these loans and only consider the value and condition of the vehicle that is being used to secure it. Despite the secured nature of the loan, lenders argue that the comparatively high rates of interest that they charge are necessary. As evidence for this, they point to the increased risk of default on a type of loan that is used almost exclusively by borrowers who are already experiencing financial difficulties.
Most title loans can be acquired in 15 minutes or less on loan amounts as little as $100. Most other financial institutions will not loan under $1,000 to someone without any credit as they deem these not profitable and too risky. In addition to verifying the borrower's collateral, many lenders verify that the borrower is employed or has some source of regular income. The lenders do not generally consider the borrower's credit score.
^"Avoid Car Title Loans". Iowa Department of Justice. December 2005. Archived from the original on December 26, 2012. Retrieved November 28, 2012.
^"States to Protect Borrowers Who Turn to Cars for Cash". The Wall Street Journal. July 2010. Retrieved November 28, 2012.
A titleloan (also known as a car titleloan) is a type of secured loan where borrowers can use their vehicle title as collateral. Borrowers who get title...
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payday loan (also called a payday advance, salary loan, payroll loan, small dollar loan, short term, or cash advance loan) is a short-term unsecured loan, often...
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Vehicle titles are also used for car titleloans, in which a car owner gives the vehicle lender their vehicle title as collateral in exchange for a loan. In...
are loans secured by a property in addition to the primary mortgage. Depending on the time at which the second mortgage is originated, the loan can be...
A secured loan is a loan in which the borrower pledges some asset (e.g. a car or property) as collateral for the loan, which then becomes a secured debt...
lenders, and other traditional sources of consumer credit. TitleMax offers titleloan and title pawn products which allow customers to meet their liquidity...
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include payday loans, rent-to-own agreements, pawnshops, refund anticipation loans, some subprime mortgage loans and car titleloans, and non-bank check...
is an individual or business (pawnshop or pawn shop) that offers secured loans to people, with items of personal property used as collateral. The items...
against financial loss from defects in title to real property and from the invalidity or unenforceability of mortgage loans. Unlike some land registration systems...
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consumer loans and payday loans through its subsidiaries including TitleMax, TitleBucks, EquityAuto Loan, Community Choice Financial and InstaLoan. The company...
vehicle and look to the proceeds of sale for satisfaction of the loan. Unlike a car titleloan in the United States, the logbook lender can, under English...
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a program of Federal financial assistance by way of grant, contract, or loan to take action pursuant to rule, regulation, or order of general applicability...
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