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What is the average interest rate on car title loans?
I’m applying for loans to fix up my cottage. All the interest rates I’m seeing are too high. I’ve heard car title loans can provide cash quickly—but what is the average interest rate on car title loans?
Jack Walsh · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Car title loans can certainly provide cash quickly. But since the average title loan interest rate is somewhere around 25% a month or 300% per year, title loans are almost never cheaper than other types of loans.
Keep in mind: Car title loans are not legal everywhere, and interest rates can vary by state and lender. To find the best interest rate and most favorable terms, compare offers from multiple lenders before signing an agreement.
Also, lenders can repossess your vehicle if you fail to repay a car title loan—so taking out a loan from your bank could prove to be cheaper and less risky.
If you’re still trying to figure out how to get your loan money, you could:
- Use a credit card
- Ask family and friends for a loan
- Visit a credit union
If you do get a car title loan, pay it off as quickly as possible to avoid sky-high interest payments.
View full answer
- Gregory R.
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