A car title loan, or simply title loan, is a loan where the borrower provides their car title as collateral for a loan.

These loans are typically short-term, and tend to carry higher interest rates than other sources of credit. These loans have higher interest rates than other sources of credit because the lender typically does not check credit and that the only consideration for the loan is the value and condition of the vehicle. The high interest exists because the lender perceives greater risk associated with these types of loans, despite the secured nature of the loan. Title loans tend to be taken out by people who are in a financial bind, which raises more questions about the high interest rates.

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 $1000 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 other source of regular income. The lenders do not generally consider the borrower's credit score. The loan is secured by the title to the vehicle.

Contents

• 1 Process
• 2 Regulation
• 3 See also
• 4 References