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How much interest is on a car title loan?
I’ve had many unexpected repairs and bills this month and I need to borrow money to afford rent and make ends meet. Unfortunately, I have a poor credit score, and my bank denied my loan application. I’m thinking of taking out a car title loan, but I’m worried about interest. What’s a typical interest rate on a car title loan?
Jack Walsh · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Being approved for a loan with poor credit can be incredibly challenging and getting a car title loan might feel like your only option. But with an average interest rate of around 25% per month, or the equivalent of 300% per year, they can be tough to repay.
The interest rate on a car title loan varies by state and lender. But with costly monthly fees, an APR that can easily reach 300%, and the risk of having your vehicle repossessed if you can’t pay, title loans are a last resort only. Alternatively, you could:
- Use a credit card
- Visit a credit union
- Ask friends and family for a loan
- Find a cosigner for a personal loan
If you have to take out a car title loan, shop around and compare offers from a few lenders to ensure you get the best rate.
To help make ends meet and make loan payments more manageable, you should also look to save on other expenses such as your
car insurance
.View full answer
- Gregory R.
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