Car Title Loan

Car title loans are loans given using the title of the car as collateral. Usually these loans are short term, even just 15 or 30 days, and charge enormous interest. When we say “enormous,” we mean triple digit interest, plus extra fees.

That’s not your only risk, either. If you default on your loan, the loan issuer can take your car. The lenders are gracious enough to offer you another loan to extend your first one though...for another set of fees, of course, and with that same staggering interest.

The subsequent loans are known as “rollover” loans. These are very similar to payday lenders. If it tells you anything about the success rate in this market, a lot of the lenders require GPS to be installed in the car before they issue the loan.

These loans often don’t have fairy tale endings. Look at this way: if Cinderella had taken a car title loan out on her carriage and didn’t pay it on time, she may have more to worry about than it turning back into a pumpkin...somebody would be coming to repo that pumpkin right back to the patch, and then bill her for the tow.