Title Pawn: How to Pawn Your Car Title
In times of urgent financial need, pawning your car title might be an option. Also known as a title loan, this secured loan provides quick access to cash for borrowers who own their car outright.
Title pawns are known for easy applications, quick approvals, and lenient credit score requirements. In this article, we’ll explore what a title pawn entails and guide you through the process, helping you decide if it aligns with your financial needs.
What is a title pawn?
A title pawn is a secured loan that uses your car as collateral. If you own your car free and clear – meaning that it’s paid off – you can exchange the title for a lump sum of cash.
Since the collateral reduces the lender’s risk, title pawns may come with lower interest rates compared to unsecured options, especially if you have poor credit.
How do title pawns work?
After you apply for a title pawn, the lender needs to appraise your vehicle before approving your application. If approved, the amount of money you receive is based on the vehicle’s value.
Although the lender will hold onto your title, you can continue driving your vehicle while you repay the loan. Once you’ve repaid the loan in full, you’ll get your title back.
>RELATED: Check Your Car's Value
How much money can I get from a title pawn?
With title pawns, borrowers receive a percentage of their car’s appraised value, but usually not the whole value. The lender will first conduct an appraisal of your vehicle to figure out how much it’s worth. Then, they’ll typically offer you a loan amount worth 25 to 50% of your car’s value.
For example, let’s say your car appraises for $10,000. The lender bases their loan amounts on 25% of a vehicle’s appraised value, so they offer you $2,500. Since you’ll end up owing more than that in fees and interest, you decide not to borrow that full amount and settle on a $1,500 loan that better fits your budget.
Benefits of online title pawns
Title pawns have several advantages, especially if you don’t qualify for a traditional loan.
Easy application
Depending on the lender, you can complete a title pawn application online or in-store in just a few minutes. You’ll just need some personal and financial details, along with your title and basic information about your vehicle.
Quick approval
You should receive preliminary approval within moments of submitting your loan application. After that, you’ll need to finalize the approval by visiting the lender or a third-party appraiser. Appraisals typically take a few minutes.
In some cases, you can receive the funds from your title pawn the same day you’re approved.
Larger loan amounts
Since title pawns are secured with collateral, you can potentially borrow a larger amount than you can with an unsecured loan. This is because the amount is based on your vehicle’s value, not necessarily your credit history. The more valuable your vehicle, the larger the loan offer.
You don’t need good credit
Borrowers don’t need good credit to get approved for a title pawn. Because you're offering your car as collateral, many lenders don't check your credit history at all. Instead, they will consider other factors like income, employment history, current debts, and your car’s value when deciding whether to approve you.
Title pawn repayment terms
With title pawns, you can often pay back your loan plus interest in monthly payments over time. The repayment period for title pawns can range from a few months to a few years, depending on the title pawn lender and loan terms.
Can I get a title pawn online?
Yes, many lenders let you begin the application process for a title pawn online. Once you submit your online application, the lender will conduct an in-person appraisal of your car and provide the loan offer in person.
How to get a title pawn
If you're interested in getting a title pawn, here’s what you need to do:
1. Gather all necessary information
Get ahold of your car title and any required documentation you’ll need to show the lender. You’ll also want to do some research to figure out how much your vehicle may be worth. This will prepare you for the title pawn application process.
2. Fill out an application online or in person
Depending on the lender, you may be able to apply for a title pawn online or in person. We’ve partnered with LoanCenter to offer online title loans to Advance America customers. Whichever lender you choose, be prepared to share basic details about yourself as well as information about your car, including the make, model, year, and condition.
3. Get your car appraised
Next, the lender will need to appraise your car in person. They will either come to you or ask you to meet them at a neutral location.
4. Fill out and sign the loan paperwork
Once you receive an offer, fill out and sign all the documents. Read all the paperwork carefully and ask the lender questions in case you need further clarification.
5. Receive your funds
In many cases, you can receive your money from a title pawn the same day, shortly after your car has been appraised and you’ve filled out the loan paperwork. Once you get the funds, you can continue driving your vehicle as you repay the title pawn.
How do I know if a title pawn is right for me?
Title loans can be good options for borrowers who don't have good credit and can’t get approved for unsecured financing or want to avoid high interest rates. They're also a good option for those who can't show proof of a steady income or who have a lot of outstanding debt. As long as you own your vehicle outright, a title pawn could be a viable option for you.
However, if you can qualify for a traditional unsecured loan, you might want to go that route. This way, you don't risk losing your means of transportation if you can't repay your loan. If you have a strong credit history, you can also potentially get a larger loan with a traditional unsecured loan since a title loan is based on a percentage of your car’s value.
Title pawn alternatives
At Advance America, we have a few alternative financing options that may be better suited to your needs. These include:
Payday Loans
Payday Loans are designed to get you money in a hurry to pay for immediate needs. Loan amounts are typically less than $500 because you’ll need to repay the loan in full when you receive your next paycheck.
Installment Loans
If you need more money than what's available with a Payday Loan, an Installment Loan can be a good alternative. Installment Loans are given as a lump sum that you can repay over several months or years, depending on the size of the loan.
Line of Credit
When you need a revolving loan that offers easy access to ongoing funds for months or years on end, consider a personal Line of Credit. Lines of Credit are unsecured loans that are kind of like credit cards in that you can spend money from the line as needed and you'll only pay interest on the money you withdraw, not on the entire line.
Whether you want to apply through our title loan partner or one of our loans, Advance America offers plenty of options. Apply online at your convenience or visit us in person at your local store.
Notice: Information provided in this article is for informational purposes only. Consult your attorney or financial advisor about your financial circumstances.
About the author
Jalin Coblentz has contributed to Advance America since 2023. His experiences as a parent, full-time traveler, and skilled tradesman give him fresh insight into every personal finance topic he explores.
