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What is the definition of a title loan?

Title Loan Definition

Updated on May 6, 2022


Getting into a situation where you may need emergency cash is not unusual because emergencies can happen to anyone at any time. While some consider selling assets to pay off their bills or debts, others think about getting a Title Loan and keeping their vehicle instead.

If you do have a clear title on your vehicle and haven't realized that getting a title loan is a better option than selling other assets to pay off your bills or debts; you probably fall into one of two categories:

  1. You haven’t heard about Title Loans
  2. You have heard about Auto Title Loans but don't understand what they are.

Over the years, title loans have earned a reputation of providing individuals a quick boost of funds during financial emergencies without the hassles that traditional loans bring. However, a significantly large number of potential borrowers shy away from title loans either due to the myths and fears surrounding the practice or because they are unfamiliar with how title loans work.

At CASH 1, we believe that you should know about the various types of loans that are available to you. This will help you to quickly narrow down what option is the best solution for you when you need money fast. Though it may sound basic, it’s because we don’t want to repeat the one mistake most lenders make by assuming that every visitor that comes to their site knows what a title loan is. So for those of you that don't know what the basic definition of a title loan is, you've come to the right place.

Title Loan Definition

If you are on your way back home after being rejected by a bank, the car you’re driving could get you the cash you need. Before we tell you how, let’s begin by going over what a vehicle title is and details of what a certificate of title contain.

To keep it simple, a vehicle title designates ownership. If you have paid off your car, you should have the title in your possession. However, you should always check to make sure your car title has your correct name, address, and state on it. On the other hand, your vehicle registration proves that you have the authority to operate the vehicle. Generally, you can get a title loan by using your vehicle’s title, but CASH 1 gives you the cash you need with or without a clear title.

In laymen terms, a Title Loan is the definition of a secured loan where you can use the title of a personal vehicle such as a car, truck, RV or motorcycle as collateral. Here the lender becomes the lienholder as the borrower needs to temporarily surrender the hard copy of their vehicle title, in exchange for a loan amount. When the loan is repaid, the lien is removed, and the borrower gets back the car title. This way you not only get the cash you need but also get to keep driving your car. Since this is a collateral loan, it doesn't matter whether you have good, bad or no credit. It is also not necessary for you to have a job to get a title loan as long as you can provide some form of proof of income.

You will find different definitions of title loans on various sites because there is no industry definition for the term Title Loan. Although all lenders use similar ways to determine whether or not they're going to loan money to you, the term of the loan often varies from lender to lender. These terms can be anything from interest rate to how much they are going to loan you based on the value of your vehicle. In the end, they all base the loan on the equity of your vehicle (how much it is worth). Make sure to do some comparison shopping so that you know you are getting the best rate you can.

Making the Best Use of Your Vehicle

The most important thing to remember is that CASH 1 title loans doesn't believe in keeping you from using your vehicle. When you get a loan against your car title, you only hand the title over to us, and not the vehicle itself. So, throughout your repayment term, you can continue driving your car as you normally would. Nobody has to know that you're using your vehicle as collateral for a loan if you don't want them to.

Title Loans History, Then & Now

Title loans were introduced for the first time in the early 1990s which opened up new avenues for individuals with poor credit. The idea of using one’s vehicle title to get instant cash gained popularity in no time, as per the studies by the Center for Responsible Lending and Consumer Federation of America. However, title loans were considered the cousin of unsecured loans, such as payday loans. This is because many default borrowers used their car titles to get loans and ultimately lost their vehicle by not being able to bear high-interest rates and large monthly payments.

The title loan scene today is quite different from what it used to be. Many loan companies have adopted more liberal policies to ensure borrowers can repay their loans on time. Not that they forgive debtors for failing to make payments, but instead, they set rates and terms that are based on the borrower's actual ability to make payments. This is all thanks to the Consumer Financial Protection Bureau for proposing national regulations to help curb predatory lending practices. In addition, you can now get Title Loans online in just a few easy steps. So if you are living in the either Arizona or Nevada, you can apply online today and pick up the cash you need at the nearest CASH 1 store to you!

Title Pawning Definition

Moreover, this brings us to title pawning. You may often get confused when you hear people talk about pawning their car. Well, as previously mentioned, it is the same as title loan that uses your vehicle title as collateral to secure your loan. The only difference is that in some states, this type of secured loan is known as a title loan while other states call it a title pawn. When you don’t have a high enough credit score to get you emergency funds, your vehicle’s title and its value can become your credit.

However, in a few states, car title pawn or auto pawn uses both the car title and the physical vehicle to secure the loan much like a traditional car title loan. In this case, since the lender has both the car and title in their possession, the borrowers will generally receive more cash in this transaction. However, you need not worry about this if you live in Arizona or Nevada, you can keep driving your vehicle if you get a title loan with CASH 1. We can get you a title pawn on your car, motorcycle, truck or RV with loan amounts from $150 to $50,000 with the freedom to continue to drive your vehicle.

There are endless reasons for which you can use a Title Pawn. If you have to make an emergency trip for family living far away but find yourself without enough time to save up. That’s a perfect way you can use a title pawns. Another typical situation where people find themselves needing cash is for making repairs on their cars or homes. If you don't have time to scrounge up some much-needed cash and can't sell your vehicle, this is another great reason to get a title loan and use some of that equity that you have stored up in your vehicle.

Car Title Loans are not Payday loans!

If you have been avoiding title loans because you thought them to be payday loans, you are missing out on one of the most accessible sources of funding. In reality, they are far from being the same.
The primary difference is that payday loans are unsecured loans. This means your income will play a significant role in deciding your loan terms, from your eligibility to get a loan to the amount will be much less than a title loan. Whereas, title loans are specifically designed for individuals who have a history of bad or poor credit scores. A title loan lender only considers your income and value and condition of your vehicle that is being used to secure the loan.

At CASH 1 our monthly payments are designed to fit your ability to pay and due on your pay days. If you are thinking about paying off your loan early, CASH 1 has no prepayment penalties, so feel free to pay off your loan early and save money on interest!

Title Loans At CASH 1 Means:

  • Quick Access To Cash
  • No Traditional Credit Check
  • You Can Still Use Your Vehicle
  • Repay In Installments

Is There Something You Were Looking For?

If there was something else you needed, feel free to contact us because we want you to be prepared for any unexpected financial obstacle that comes up. For this, you need to be aware of the best available options that can help you get money in less than a day. Fortunately, one of the best solutions in today’s time is getting a title loan, often referred to as a title pawn. Regardless of your credit or a stable job, you can get a CASH 1 title loan. Now that you know what a title loan is, you can read further about how title loans work. If you are still indecisive you can see us at CASH 1 and find out whether loan utilizing your car title is right for you.