When you’re in need of cash, you might be tempted by late-night commercials offering quick cash with only your car as collateral.
These loans are most commonly known as car title loans, but go by many names—pink-slip loan, title pledge or title pawn. Is this a smart option? Here is what you need to know.
These loans are most commonly known as car title loans, but go by many names—pink-slip loan, title pledge or title pawn. Is this a smart option? Here is what you need to know.
What Is an Auto Title Loan?
In 21 states, if you own a car, you can probably get an auto title loan. (There are some auto title lenders who allow consumers to borrow against a vehicle if they have a certain percentage of equity, but those are uncommon.)
You take your vehicle to an auto title lender — generally a storefront business — where the lender determines the value of the vehicle and offers you a loan for a certain percentage of that car’s value.
You take your vehicle to an auto title lender — generally a storefront business — where the lender determines the value of the vehicle and offers you a loan for a certain percentage of that car’s value.
Lenders
You give the lender the title as collateral for the loan, giving the lender the ability to repossess your car if you do not repay the loan. The average loan is $951 and is due in full, plus fees and interest, in 30 days, according to a report from the Center for Responsible Lending.
Fees generally run $25 per $100 borrowed, so that’s $237.75 for the average $951 loan (plus interest).
Fees generally run $25 per $100 borrowed, so that’s $237.75 for the average $951 loan (plus interest).
Why Auto Title Loans Are Controversial
Some people think auto title loans are a useful tool, while others condemn the practice as predatory lending.
Tony Petkovich, head of global trading at PCM Capital Management, invests in auto title lenders and thinks the products serve a purpose for people who can’t get other types of loans and don’t have credit cards.
He sees it as a valuable option for business owners or consumers who find themselves in a pinch and have no other ways of getting cash they need as soon as possible.
titleloancalculator.weebly.com
Tony Petkovich, head of global trading at PCM Capital Management, invests in auto title lenders and thinks the products serve a purpose for people who can’t get other types of loans and don’t have credit cards.
He sees it as a valuable option for business owners or consumers who find themselves in a pinch and have no other ways of getting cash they need as soon as possible.
titleloancalculator.weebly.com