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Can you use your car as collateral for a loan?
I’m having trouble paying for my student loans and was wondering if it is possible to use a car as collateral for a loan?
Will Baldwin · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
I’m sorry to hear that you’re in a tough financial situation. You can use your car as collateral for a loan. This is often called a car title loan, and it’s important to know it’s considered illegal in some states because it poses a high risk to borrowers.
If you default, the bank or lender can repossess your vehicle. If you’re comfortable with this risk, some lenders will allow you to use your vehicle.
If your state offers car title loans, shop around at multiple potential lenders to see if you can find a cheaper rate and
reduce those payments
. If car title loans aren’t an option, consider looking into personal loans or credit cards to tide you over until things get easier.You can also free up some money by reducing your car insurance premium. Try using the number-one-rated car insurance app,
Jerry
, to find the best deals. Jerry compares personalized quotes from more than 50 top providers, including Nationwide and Travelers, and delivers the best deals to your phone in minutes for free. The average Jerry user 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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