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Are car title loans a good idea?
My work hours have been cut back a bit the last few weeks, and I’m not going to be able to afford my rent this month. I’ve heard title loans are an easy way to get cash quickly, but is applying for a car title loan a good idea?
Jack Walsh · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Car title loans can be an easy way to get cash quickly and help make ends meet, but title loans are only a good idea if it is your last resort and you are confident you can repay it on time.
A car title loan is a short-term secured loan that uses your car as collateral, so if the loan is not repaid on time, the lender can repossess your vehicle. To avoid the risk of losing your vehicle, expensive monthly payments, and an annual percentage rate(
APR
) that can easily reach 300%, you may want to find an alternative such as:- Applying for a personal loan
- Using a credit card
- Applying for a payday advance loan
- Asking friends or family for a loan
If you have to take out a car title loan, you should compare rates from multiple lenders to find the best offer. Also, make sure you understand the total amount you will have to pay back and when it is due.
Since finances are tight, you should also look for other ways to save. If you want to save money on car insurance, the
Jerry
app is a good place to start. A licensed broker, Jerry does all the hard work of finding cheap quotes from the top name-brand insurance companies and buying new car insurance. The average Jerry driver saves $879 a year on car insurance!View full answer
- Gregory R.
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Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.
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