What is a title loan?

One of the fastest ways to get instant cash in Texas is to apply for a title loan.

A title loan buyout is a short-term loan that allows you to borrow money by putting up your asset title as collateral. So if you need cash immediately for an emergency or some major financial commitment, a car title loan may come in handy.

What is a title loan?

A title loan is a type of loan designed to help you get through a financial emergency. If you’re an eligible Texas borrower, you can utilize the equity in your asset (most commonly a car). By this, you can gain the funds you need by offering your asset’s title as collateral to your lender.

Key Takeaways

  • Any loan that requires an asset as collateral is called a title loan.
  • Title loans do not consider your credit rating and can be approved quickly.
  • A car title loan is the most common type of title loan. In this type of loan, your car is the asset you put up as collateral.
  • Individuals that need instant cash or in financial difficulties usually take title loans.

How a Title Loan Works

The most common type of a title loan is a car title loan. You need to own a car and sign the title over to a title loan company for this loan. The loan company will lend around 25% of your car’s total value and keep your car’s title as collateral in case of default.

The typical car title loan amount is $1,000, but it can be higher. Normally, the length of the loan is 15 to 30 days. You can repay the car title loan with a single payment or on a multi-year installment plan. However, suppose you cannot repay the title loan according to the repayment agreement. In that case, your car can be repossessed immediately by the title loan company. Nonetheless, every company has its own policy, so make sure you ask them about the details before signing the agreement.

Special Considerations

Title loans may sound attractive to people with bad credit or in financial difficulty. However, it is important to know the costs associated with title loans. Learn about the Annual Percentage Rate (APR) they are offering and make sure you can catch up with the plan’s repayments.

On the other hand, many banks require income proofs to lend you a loan. Unluckily, people need financial help, mostly when they’ve no steady income. That’s where a title loan comes in handy, as they can qualify you for their loan even if you have no job. You can learn more about “How to get a title loan without a job?”


Once you understand the title loan and how it works, you may apply for a title loan. If your title loan application is accepted, the lender may contact you via email. However, it is important to get familiar with the terms before signing the agreement for a handy short-term loan option.

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