BORROW AGAINST YOUR VEHICLE WITH AN ONLINE TITLE PAWN

What Are Title Pawns, And How Do They Work

Title pawns offer borrowers an alternative financing option when traditional lenders’ credit requirements can’t be met. With an auto title pawn, you are handing over the vehicle to a lender or pawnshop as collateral for a secured loan. Borrowers who fall behind on payments risk repossession as the lender may sell the vehicle to recover the outstanding balance.

Lenders take on these types of secured transactions with minimal underwriting because the loan is backed by the collateral in your vehicle. Secured lenders accept this risk because your vehicle serves as collateral and can be sold to offset losses if you default. At the same time, an unsecured lender can’t fall back on any collateral if the customer defaults on the loan. Interest rates on title loans vary by lender and state, ranging from 36% to over 200%, so be sure to review the APR and total repayment cost before agreeing to a loan. See our state disclosures page for rates and terms in your state.

Title pawn loans range from $1,000 to $20,000, and you can sometimes pull out up to 60% of your vehicle’s equity value with a loan. Your vehicle’s resale value is used to calculate your exact loan amount, and factors such as its age, mileage, and current condition will influence the loan amount and repayment terms.

What’s Required To Pawn A Car Title

To qualify for a title pawn, you need a vehicle with equity and a fully paid-off title. As with car title loans, you need a vehicle titled in your name (co-signers are sometimes allowed on the car’s title, but they’ll need to be added as co-applicants to the loan agreement). While some lien-free model year 2010 to 2014 cars, motorcycles, and semi trucks will qualify as collateral, you stand the best chance of getting approved with a 2015 or newer vehicle with fewer than 100,000 miles.

You need proof that the vehicle is registered with your state’s DMV, and you may need to show proof of insurance coverage. Title pawn lenders will also require government-issued ID, proof of income from your employer, or bank statements showing you make enough money to afford the monthly payment.

Expect a vehicle inspection for any loan secured by your car, which can occur at any local office or authorized repair shop. The inspection can be completed right before you sign over the car’s title, and most inspections take under 30 minutes. You’ll need to verify the mileage and VIN on your vehicle, and your lender may ask you to take the car on a brief test drive.

What Else To Know About Title Pawning

Even though the rates are high on these types of loans, lenders extend these loans to people who would otherwise have trouble qualifying for traditional unsecured loans. Title pawns are also great for someone who needs cash quickly, as the primary underwriting requirements are a paid-off vehicle and proof of income. Consider an unsecured lender offering a loan of $1,000 or more; there’s no collateral backing up the loan. With a title pawn, they’re willing to extend credit and not worry too much about your credit score because there’s equity backing the loan.

While your lender holds the vehicle as collateral, be sure to ask if they carry insurance on stored vehicles and confirm what happens if the vehicle is damaged or stolen while in their possession.

Another thing to remember about these loans is that you can always renew or refinance to obtain better payoff terms. Whether you find a new lender or reach out to your existing title pawn company, there’s a chance you can get a reduction in your interest rate after you’ve made several on-time payments. Interest rates are high, and your lender doesn’t want to lose you to a competitor. They prefer that you keep making your monthly payments at the lower interest rate, rather than have another company buy out your loan. Contact Premier Title Loans at 800-250-6279 or apply online for a refinancing quote in minutes.

Difference Between Auto Pawn Loans and Auto Title Loans

Auto pawn loans differ from traditional car title loans and registration loans in one particular way. Yes, you are using your car’s equity as collateral for these types of loans. But with an auto pawn loan, you hand over the vehicle itself as collateral instead of your car’s title. This means you won’t have day-to-day use of your vehicle, which can be a big problem for someone who needs their car to get to work or get around town.

Another difference between title pawns and title loans is that you may be able to borrow more with a title pawn than you’d ever get with a title loan, as your lender may already have the vehicle in their possession.

With a title pawn, though, your lender is holding the car as collateral, and they can immediately take possession of it once you fall behind. Unlike a title loan, there’s no need to hire a tow company and repossess the car if they already have it. Because of this, title pawning companies typically offer loans up to 60% of the vehicle’s resale value.

Benefits & Risks Of Pawning A Vehicle

An auto pawn may be a viable option for anyone with less-than-perfect credit who needs quick cash, especially compared to other loan offers that require excellent credit. Auto pawn companies, like title loan lenders, offer financing based on the vehicle’s value, which means loan amounts that can approach $20,000 for high-value cars and trucks. Another benefit is that you can be approved with a poor credit score. Now compare that to personal loan lenders that require excellent credit, and you’ll see how easy it is to pawn your vehicle for a secured loan.

However, there are risks to pawning your vehicle, and the most severe consequence is defaulting on the loan. In this scenario, your car will be repossessed and sold at auction if you don’t pay the amount due, plus any fees. Remember, by pawning your car, your lender becomes a lienholder on the vehicle, and they can repossess and sell it if you don’t follow the loan agreement.

In some states, if the sale of your vehicle doesn’t cover the full amount owed, your lender may pursue legal action to collect any remaining amount.

Other risks involve the high interest rates associated with title pawns. While bank loans for qualified borrowers may come with rates under 25%, a title pawn can come with an APR ranging from 36% to over 200%.

Apply With Premier Title Loans

Are you ready to see what loan amount and interest rate you can expect when you pawn your car title? Apply with Premier Title Loans, and we’ll give you a quick, no-obligation estimate. All it takes is your vehicle’s make, model, and year to get you a quote. Pre-approved customers with a newer, paid-off vehicle and proof of income may qualify for a title pawn of at least $1,000. Start the process online or call 800-250-6279 today.