How Title Pawns Compare to Title Loans

So, you need some cash urgently, and because you can’t get a bank loan, you’re considering using your car and title to get a title pawn or title loan. Except, you aren’t sure about the difference, if any, between the two loan types. As it turns out, the loans are not the same in a major way. Here’s what you should know about title pawns online and title loans.

What are Title Loans?

These loans usually require repayment in 30 days or less and are secured by your vehicle’s title. It’s the same for title pawns except for one big difference: with pawn loans, you’ll have to drive your vehicle to the shop for a visual inspection and leave it there until the loan is repaid, plus interest.

By contrast, a key selling point of title loans is that you can keep your vehicle throughout the loan repayment process. You’ll get your lien-free title back when the loan is paid off. And instead of taking your car in for an assessment, you’ll just have to submit recent vehicle photos to the title lender, plus shots of the odometer and vehicle identification number. 

How Much Can I Borrow?

As with title pawns, the amount you can borrow depends on your vehicle. A title lender will consider your car’s make, model, model year, mileage, and general condition. If there are any vehicle modifications or alterations, those will be factored in as well.

Title lenders will also consider your income, and you’ll need proof in the form of pay stubs, bank statements, etc. You may be able to get a bigger loan than you would at a pawn shop, depending on your income. 

If you aren’t employed, title lenders will also accept other steady income sources such as Worker’s Comp, Social Security, settlement payments, alimony, child support, rental property, self-employment, or retirement account.

Generally, you can expect to get about half your vehicle’s value, with most title loans ranging between $100 and $10,000, with $1,000 being the average. And while a title lender might run your credit, it won’t base decisions on your credit score.

What Else Do I Need for a Loan?

Both title pawns and title loans require a driver’s license (most title lenders will also accept a government-issued photo ID such as a passport). You’ll need to show a title lender proof of residence as well. This means a lease agreement or utility bill, or the like.

How Fast in the Lending Process?

You can usually have title loan funds in hand within 24 hours. Once you’ve submitted your application, including the required documents, you’ll likely get a response that day, if not within minutes. Once approved, funds will usually be available via electronic deposit, an overnight check, or from a local MoneyGram location.

Title Loans and Pawn Loans

Beginning 30 years or so ago, measures such as the Alabama Pawnshop Act began to cover title loan lenders in various states. This means title lenders and borrowers in those states must comply with legislation provisions.

Title loan borrowers, for example, must affirm that the vehicle to which the title belongs isn’t stolen. Lenders, meanwhile, must clearly detail the borrower’s obligations, including interest and any fees.

However, the two are distinct in that with title loans, you can continue driving your vehicle. After all, such ability could mean retaining the employment necessary to repay a loan. In most cases, with title loans, you also needn’t even take your car in for inspection.