A title loan is a way to borrow money against your motor vehicle. Based on your vehicle's value, a lender determines how much money you can borrow. On average, title loans are $250 to $1,500, but they can be as much as $5,000 or $10,000. The duration of these loans is often short-term, such as 30 days. In a title loan transaction, you keep your motor vehicle and drive it, while the lender keeps the title to your motor vehicle as security for repayment of the loan. If you cannot repay your loan, the lender will repossess your motor vehicle, sell it and pocket whatever you owe.


Because of the risk of losing your vehicle if you miss a single payment, you should consider the following before taking out a title loan:

On its face, a title loan might seem attractive, especially if you need cash right away or have a problem getting a loan from a traditional lender, such as a bank, savings & loan or credit union. However, if you take out a title loan you might end up losing one of your most valuable possessions and your sole means of transportation.

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