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Who holds the car title with a title loan?
I’m thinking about applying for a title loan, but I don’t understand how they actually work. Who holds the title with a title loan?
Chloe Jenkins · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Title loans can be a bit confusing and often misleading. Typically, the lender will hold your title until you’ve paid the
loan
off. As title loans use your car as collateral, the lender holds onto the title should you default on the loan. If you’re looking into title loans for a quick way to get cash, you should know that title loans are often not worth the money you’ll borrow, with interest rates of an average of 300%. For this reason, title loans are illegal in 34 states.
A less predatory option for a loan is going through your bank or credit union. Many banks offer short-term loans, similar to title loans, without the high interest rates.
Another safer, risk-free way to get some extra money in the bank is by using the
Jerry
app to reshop for car insurance. Once you download Jerry, answer a handful of questions that will take you roughly 45 seconds to complete. You’ll immediately get
car insurance quotes
for coverage similar to your current plan. Jerry customers save an average of $879 a year with no risk of your vehicle being repossessed. 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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