Car title loans
A loan secured by a vehicle you own outright — and the one product on this page where missing a payment can cost you your car, not just more fees.
What it actually costs
Typically $700-$1,000 borrowed at roughly 25% per month (≈300% APR). On a $1,000 loan that's about $250/month in fees alone before you've paid down any principal.
How it works
You hand over your vehicle's title as collateral; the lender can repossess the car if you default. The CFPB's own data found one in five title-loan borrowers has their vehicle repossessed, and two-thirds of title-loan volume comes from borrowers already in 7 or more loans — this is a repeat-borrowing product, not a one-time bridge. Among late-paying borrowers specifically, 40.7% suffered a severe penalty (repossession, lawsuit, or wage garnishment), and 22.9% actually lost the car. Some lenders install GPS trackers or starter-interrupt devices on the vehicle as a condition of the loan.
Red flags
- Any pressure to sign same-day with no waiting period to reconsider.
- A lender who won't clearly state the monthly percentage rate in writing before you sign.
- GPS or starter-interrupt device installation presented as routine rather than disclosed as a real term.
- "Title installment" products that roll the same balance forward for months without shrinking it — the CRL found borrowers flip the same loan roughly 8 times, paying about $2,300 in fees on a $1,000 loan.
A safer alternative: A credit union PAL/PAL II loan, or a small-dollar bank loan
Both are unsecured — nothing you own is at risk — and federally capped well below title-loan pricing. See the payday-loan calculator's comparison table for real current rates.
Sources
See every product's real math on the ScamWatch hub, or try the cost calculator.