Title Loans

Title loans are short-term loans secured with the title to a borrower’s car (or other high-value asset). If the borrower can’t repay, the lender can then seize the car and sell it to recoup their losses.

These loans are about as risky as it gets. Title loans typically have extremely high interest rates (it’s not uncommon to see rates in the triple digits) which are exceedingly difficult to pay back. These are flat-out dangerous loans designed to steal your car. Legally.

11% of borrowers wind up losing their cars, while others find themselves in debt many times beyond what they originally intended to borrow. To protect borrowers, some states have outlawed title loans altogether, but elsewhere, predatory title lenders face almost no regulation at all.

Before you consider taking out a high-risk title loan, make sure you know the facts about these dangerous debt traps.