An auto equity loan is a type of secured loan that allows you to borrow money against the value of your car, often whether you own it outright or have some equity in your car. To get a car title loan, you’ll often have to have a free and clear title — meaning there are no liens or other encumbrances on the title.

Is a title loan an expensive way to borrow money?

Title loans are expensive Title loans cost a lot — typically coming with interest at an annual percentage rate, or APR, of around 300%. That breaks down to an average 25% in interest charges per month.

Can you get a loan on a title?

You can apply for a title loan through a lender that offers one as long as you own your vehicle outright and have a lien-free car title. During your application, you’ll need to show your lender your car, proof of ownership (your car title) and your license.

Can you borrow money for a car title?

The amount of money you borrow when you apply for a car title loan is dependent on a few things that you should keep in mind during the application process. There is no flat rate pay-out system with car title loans, the prices vary from application to application.

Can a car title loan be used as collateral?

With a title loan you can use your car as collateral and take out a loan against the value of your vehicle. The amount of money you borrow when you apply for a car title loan is dependent on a few things that you should keep in mind during the application process.

What happens if you get a car loan?

The loan amount: because the loan is secured by a car, the loan amount will generally be tied to the vehicle’s value. The risk involved: with this type of loan, if you cannot meet your repayments, you may risk losing the vehicle you have used as collateral.

Why is it good to get a car title loan?

When it comes to getting and repaying your car title loan, a low interest rate benefits you in every possible way because instead of paying 30% interest and 70% towards your principle loan, you will be paying far more on your loan and far less towards interest, which means you are going to get that loan paid off in no time at all!