How can one define "Auto Title Loan"?

An Auto Title Loan is a short term loan,usually not longer than 30 days. Your car title is used to secure the loan. This means if the loan is not repaid, the lender may take the car and sell it to get the loan money back. Most title lenders will only make the loan if you do not owe anything else on the car.

About Auto Title Lenders?
Auto Title Lenders target people with bad credit, low-income individuals, military members, and elderly people. The lenders make money from high interest rates and the repossession of cars when consumers cannot pay off the loans.

Be careful with an Auto Title Loan?

When one person is facing financial problems, a short-term Auto Title Loan seems like a good option, especially to someone with credit problems. However, the solution is short term and the effects can be devastating. You can end up paying very high interest rates and lots of money or lose your car.

Interest rates?
The loan is written with an interest rate for a short time period. For example, the loan will show a 25% interest rate for one month. But this rate over a year is actually 300%. Auto Title Lenders will usually write a loan for 30 days or less. At the end of the month, the lender will accept the interest payment and allow the debt to be “rolled over” for another month. On a $600 loan, the interest would be approximately $150.

All the loans for at least $601 dollars?
Obviously, Lenders can only charge the high interest rates on loans over $600. Under South Carolina law, loans below this amount have limited interest rates. This means they would make less money. That is why the Auto Title Lenders often call themselves 601 lenders.

If one can’t pay the loan off within the proper time?
If one can’t pay off the loan it will be rolled over. In many cases the borrower will not be able to pay the loan off in full, and the interest will begin to build up all over again at the high rate. This is called “rolling over” or ‘flipping” the loan.

How many times can the loan be “rolled over”?
By law, the lender may not allow the loan to be renewed more than 6 times. If the loan is “rolled over” that many times, the interest charged will be very high.