Definition
A short-term loan using your car title as collateral. It can be expensive, so consider other options if you need quick cash.
What to consider
- Reserve this option only for true emergencies due to high fees.
- Explore other alternatives before taking out a title loan.
- Be aware of the risks, especially if you depend on your vehicle daily.
Real world scenarios
- Brenda considers an auto title loan to pay for emergency home repairs. After learning about the high fees, she instead negotiates a payment plan with the contractor.
- Keon’s friend suggests an auto title loan, but Keon worries about losing his car if he misses payments. He looks into a small personal loan instead.
- Nadia sells unused items online for quick cash, avoiding the steep interest of auto title loans and preserving her vehicle’s title.
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