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The Truth About Auto Title Loans

For years, people have been warned against the pitfalls of using a car title loan. In the past, these types of loans were notorious for charging people outrageous fees in their time of need, and often making them dependent on their services. However, that is not the case with auto title loans.

What is an Auto Title Loan?

An auto title loan is similar to a personal loan received from a bank. The only difference is that you use your car title to secure the loan as opposed to your credit. Because credit is not attached to an auto title loan, even potential borrowers with poor credit may receive a loan based on the value of their car.

What are the Benefits of Using an Auto Title Loan?

The worldwide economy has affected everyone in some way, and for many it has caused them to tighten their wallets. However, some have been even more affected and have experienced layoffs or the inability to pay certain bills on time each month as the cost of living rises.

When life causes unexpected financial burdens, such as car repairs or lawyer fees, an auto title loan can get you the money you need in as little as one hour without forcing you to sell assets or further compromise your emergency funds. Other benefits to using an auto title loan include:

  • No additional out-of-pocket expenses
  • Monthly repayments suited to your budget
  • A 36 month repayment period
  • No pre-payment penalties

How Do I Obtain an Auto Title Loan?

Only companies properly licensed to obtain auto titles may provide a person with an auto title loan, and they will require that you have ownership of the vehicle and that the vehicle is worth at least $4,000 in order to provide a loan. Auto title companies do not generally require a credit check to secure a loan, but they all do require certain auto and income related documentation. Basic documentation that is usually required to secure a loan includes:

  • Personal references
  • Proof of vehicle ownership
  • Proof of residency
  • Proof of income
  • Proof of insurance
  • Drivers license

When used responsibly, an auto title loan can be a good way to supplement income without having to worry about short repayment periods or high financing charges. When considering the decision to acquire an auto title loan, always choose a credible company with a long standing reputation of excellent customer service to work with. Don’t be afraid to ask for recommendations or to turn down a company’s service when they don’t seem reputable.

Author Bio: Taylor Lawrence is a freelance writer from Lincoln, NE.


  1. Doable Finance

    That means auto title is used as collateral which makes it secured loan.

  2. Shaun Somers

    If I was working with someone who was having enough problems with their finances to have “the inability to pay certain bills on time” or have been laid off, I won’t recommend that they take on an extra monthly payment.
    If they have a car worth more than $4k, then they could almost certainly sell that car and get a different car worth from $1000-2000. Then they’d have two thousand bucks to help them out and most importantly, NO new payment for the next three years!

  3. optionsdude

    I did this in the late 80’s through a credit union and got a pretty good deal on the interest rate. It worked for me back then.

  4. Ann

    I borrowed some money from a lender using my car. They did not do a credit check since they said they work with people that have bad credit. I was able to borrow 5000 and repay over a term of 4 years. I was out of their office within an hour with $5000 cash in my hand.
    I am from Calgary, Alberta and I used Equity Cash – they were the only ones in town willing to provide a long-term repayment plan, all others wanted me to pay within 30 days. Their website is

  5. Chloe Hughes

    @Shaun Sommers the difficult thing is when someone is in a bind and needs cash immediately for an emergency such as a health issue or food for children, then its hard not to rationalize the future payment when I can satisfy a need right now. I know of many parents out there that would do anything to help a child in dire need and this might just qualify as “anything”. They go into the loan knowing the terms as outrageous as they can be and there are no surprises and if they have questions they can refer to the document that they put their signature on.

  6. Derek

    The Author indicates that “only companies properly licensed to obtain auto titles…..”. How does one know if they are properly licensed?

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