A car title loan is a loan for a small amount of money and for a short time.
To get a car title loan, you give the lender the title to your vehicle – for example, your car, truck or motorcycle. You also pay the lender a fee to borrow the money. You usually have to repay the loan in 30 days.
Car title loans can be very expensive. If you cannot repay the money you owe, the lender can take your vehicle.
You might be able to borrow money from:
You might ask for more time to pay your bills. You can talk to a credit counselor to get help.Read more
You can get a car title loan online or at a store. This is how they work:
Some lenders require an extra copy of your car keys or make you buy a roadside service plan.
Lenders charge a monthly fee. This fee can be a lot – sometimes as much as 25% of the amount you borrow.
Most loans have an annual percentage rate. This is also called the APR. The APR tells you how much it costs to borrow money for one year. The APR on car title loans can be very high.
When you get a car title loan, the lender must tell you the APR and the cost of the loan in dollars.
APR is based on:
You might not be able to pay the lender when the money is due. The lender might let you borrow the money for another 30 days. This is called a “rollover,” or “rolling over” the loan. To roll over the loan, you will pay another monthly fee.
If you roll over the loan several times, you might pay a lot to borrow the money. Eventually, you might not be able to repay the lender.
If you cannot pay the lender the money you owe, he might take your car. This is called repossession. The lender may sell your car and keep the money.
If the lender takes your car, you might lose your only transportation. This could make it hard to get to work, school and other places you need to go.Read more
A car title loan is a loan for a small amount of money and for a short time – usually 30 days. They can be very expensive. If you cannot pay back the lender, you might lose your car.
Before you get a car title loan, consider other choices:
Compare the costs, if you have more than one option. For each choice, find out:
Write the answers to these questions. Decide which choice is best for you.