had never heard of a Title Loan before today, which is also known as a car title loan or an auto title loan. I did not know this type of loan was even possible. What it is, is an option for a person to allow a lender to use your vehicle to secure a loan and hand over their original car title to the lender in exchange for a specific loaned amount of money. Depending on the worth of the car, going by the age, miles, make, model and condition, title loans can range from $500 to $15,000. It is usually a short-term, flexible loan and rather easy to qualify for, since a credit report is not even needed. When the borrower has paid off the loan, the car title is returned to the owner. However, if the borrower defaults on payments, the lender can reposses the car and sell it to payoff the outstanding debt.
So say your friend is checking into title loans in Stockton, CA. She just bought a new house and after the first major rainstorm, has found that there is a major leak in the dining room. She knows with her new mortgage loan and other credit card loans, she would not be approved for any more credit but it’s an emergency to get her roof taken cared of. Her 2009 Jeep Cherokee is fully paid off. She decides to see if she can get a title loan on her Jeep. There is no charge to find out what her Jeep is worth and she is told that the loan can be done very quickly, most likely all within the same day of filling out the application.
In some ways this does sound scary, as it seems it would be someone who does not have either good credit or may be over their head in credit, getting this type of loan and needs to be extra careful in paying it off as quickly as possible to avoid loosing their vehicle. So a title loan is definitely something to take great caution in getting.