Title Loans

The Risks of Title Loans

Title loans are great short-term loans especially when you are in need of instant cash. You can get a title loan in as little as 20 minutes. Considering the internet age we are in, the application process is even quicker since you don’t necessarily have to go to the physical location of the offices of a title loan company to apply for the loan. It is a fast and straightforward process. Nonetheless, in as much as title loans are great and convenient quick money, they can backfire on you in ways you didn’t anticipate. Prevention is better than cure. Watch out for the following if the money you borrow is to be fruitful and actually help you make ends meet.


The obvious risk with title loans is the fact that one may lose one’s vehicle in the event one fails to pay back the loan. I mean, the moment you acquire this loan, you know that your vehicle is on the line. My approach is always to take calculated risks and taking loans is one of the risks you should take after you have done your math well; that is if you value your vehicle. Most people may not realize it but it is so easy to default if one is not careful.

You don’t have to lose your vehicle. That was not your intention in the first place. You wanted to get some quick money to help sort things out and after a calculated period, your plan was to pay back what you owe, eventually settle the debt, and get the title of your vehicle back. A trick that many people may not know is that the quicker you pay up the loan, the less it’s going to cost you. However, if you take your time paying the loan, it will drain your pockets and you may fall into the trap of renewing the loan. I would advise you avoid renewing the loan because the moment you do so, it is very easy for it to become a habit and you’ll find yourself in a labyrinth of your own making.

Hidden Fees

In the US, 23 states don’t allow the establishment of title loan companies due to the complications they can introduce in people’s lives. However, the 27 that permit car title loans demand that title loan companies should be transparent about all related fees associated with the acquisition of the loan. Chances are that the company you get your title loan from will let you know all the charges that will come with the loan. Nonetheless, you want to be careful with this aspect of the loan. Some companies may try to take advantage of you, particularly if you are naïve. Just ensure you know all the charges that will come with the loan.

One charge you should watch out for are late fees since there are companies that will charge you if you don’t pay up within the agreed period. Remember, you are also paying interest on the loan. Therefore, the late fees, the interest, and other charges that may show up can make things complicated for you. If you disregard any charges, that means you’ll end up with more dept. The extra fees like financing fees, late fees, coupled with the interest and balloon payments can make a title loan a nightmare for you if you are not careful.

Defaulting and hidden fees/ charges are the main risks of title loans. Title loans are not bad, really. They can save your sinking ship. The thing is that like any other loans or any activity that involves the lending of money, you should do your homework for things to work out. Do yourself a favor and get yourself out of the hole you are in instead of making it even deeper. Take title loans or any other loan with a solid plan. That is all I’m saying in this article.

Working in the web development and marketing industry for over 10 years. Been part of several large projects, coded a lot of websites, and owning several bigger projects. Right now, I am focused more on my personal life, doing what I like, trying not to be someone's slave... if you know what I mean.

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