Advantages and Disadvantages of Title Loans

As millions of Americans struggle to make sense of this new economic climate, there has been a great deal of discussion in the media about lending solutions. Some of the most highly-debated financial instruments are .

Quite frankly, these loans have received mixed reviews by the press and consumers. Regular media reports portray these loans in a negative light. However, many title loan customers believe that these loans have saved them from financial ruin.

With all of these mixed messages circulating through media outlets, it’s hard to know what to believe about these loans. If you want to learn more about these loans, this article can provide you with the advantages and disadvantages of a title loan.

Advantages of  Title Loan

  1. It is easy to qualify for a title loan

    There are no credit checks involved with the title loan application process. Other title loan requirements include you must have a free and clear vehicle title, regular monthly income and state-issued identification.

  1. You can apply for your title loan online

    That’s right. There are hundreds of national online lenders that provide this convenient service. In many instances, you do not have to go to a physical location to finalize your loan process. Your title loan needs can be handled from your computer and cell phone.

  1. You can be approved for a title loan on the same day you apply for the loan

    If you cannot wait a week or more for approval from traditional lenders, this type of loan will benefit you.

  1. Your title loan cash will be deposited into your bank account

    Direct deposits make it easier and faster for you to meet your emergency financial needs.

  1. You can borrow as much or as little money as you need

    The value of your car determines the amount of money you can borrow from a title lender. If your car is valued at $9,500, you may be eligible to borrow any amount of money that does not exceed that amount.

Disadvantages of  Title Loan

  1. You are using your car as security for the loan

    If you miss your car payment, title lenders can legally repossess your car.

  1. A title loan has higher interest rates than traditional loans such as car loans, mortgages and personal loans

    A title loan is intended to be a short-term financial solution. You can lower the amount of interest that you pay by repaying the loan early.

  1. Title lenders place a lien on your vehicle’s title

    This lien is recorded at your state’s motor vehicle administration. You will not be able to get another loan for your car until you repay the loan.

  1. A title loan is only legal in 30 states in the United States

    If you live in a state that does not authorize the administration of these loans within its borders, you will have to travel to another state to secure a loan. Another option is to apply for a title loan online.

  1. Paying your loan late can result in additional fees and additional interest

    The balance on your loan increases when you pay your installments late. As a result, your loan can become less affordable for you.

Before you get a title loan from an online title lender, it is important for you to know the benefits and consequences of securing these loans. However, if you manage your title loan correctly, you can have a positive title loan experience.

Last updated on : January 20th, 2018
What’s your view on this? Share it in comments below.

One Response

  1. Robert Smith

Leave a Reply

Bonds and their Types
  • Bonus Share
  • Sublease
  • How to Choose Right Source of Finance for Your Business
    How to Choose Right Source of Finance …
  • Hire Purchase Agreement / Contract
  • Subscribe to Blog via Email

    Enter your email address to subscribe to this blog and receive notifications of new posts by email.

    Recent Posts

    Find us on Facebook


    Related pages


    what does credit and debit mean in accountingfactoring as a source of financeadvantages of conglomerate mergerirr approachincrease overdraft limittypes of contingent liabilitiesexamples of leased softwareprofit maximization economicstrade debtors accounts receivabledefine net tangible assetsthe definition of rationingdefinition asset turnoveranalysis of ratios in financial statementdefine lessee and lessoraverage debtors collection perioddefine acid test ratiobond and debenturemishappening meaningadvantages and disadvantages of buyback of sharesformula ytmdifference between credited and debitedquick ratio calculationordinary shares advantages and disadvantagescalculating dividends from balance sheetdifference between financial and managerial accountingdefinition of bonus issuecalculate payback periodppe turnovertypes of accounts in accountancyirr manual calculation exampletobin s qdebt service coverage ratio ebitdaretained earnings calculatordebt to equity ratiosformula payback periodwhen do inventoriable costs become expenseswhat is meant by sundry creditorsreal nominal personal accounts rulesdividend decision theoriesworking capital requirement analysisdscr report formatwhat is wealth maximization and profit maximizationadvantages and disadvantages of jitcalculate simple paybackcalculating economic value addedwealth maximization goalwacc formula explanationexplain retained earningsdu pont formuladefine nopatnet present value and irrdefinition of capital budgeting in financial managementexamples current liabilitieslessees and lessorsdebenture interestrevaluation surplus definitionaccounting equitiontypes of financial covenantsgaap depreciation methodspv and fv tableshow to calculate inventory turnover perioddivisional waccsight lc paymentbreak even sales in units formulaebit equationdistinction between mergers and acquisitionshow to calculate interest earned ratiohow to calculate inventory holding perioddebit and credit rulesmarginal costing and decision makingnet credit sales formuladebt to asset ratio analysisvertical strategic allianceexamples of profitability ratiosexplain capital rationingconstant payout ratio policy