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01 Jul 2019   /   0 comments

Are Title Loans Bad?

Are Title Loans Bad

pexels-photo-164661 (1)When making a decision on whether or not title loans are a good option for you or not, you may want to know the answer to the question “ are title loans bad ”.

Here, at TFC Title Loans, we are well aware that there can be a lot of worry and uncertainty when it comes to Car Title Loans. Let’s find out Are Title Loans Bad?!

Are Title Loans Bad?

They have risks and disadvantages just like any other lending option that is available in today’s economy. As a company, we are passionate about lender transparency and consumer education which is why we have been steadily expanding our website to include various resource pages on a wide range of topics.

And this resource page will address the risks and disadvantages of title loans and the ways in which TFC Title Loans lessens those so these loans are helpful for the right customer.


There are some dangers that go along with Car Title Loans that are atypical of other kinds of a more traditional loan, similar to those lent by banking institutions.

Car Title Loans are secured loans rather than unsecured loans so that approval need not be dependent upon the borrower’s credit score; instead, approval and amount is based on the collateral value found in your vehicle.

Since these lenders are taking on borrowers with sub-prime credit scores, their risk in the lending venture is substantially higher. It is for this reason that they usually need to charge a higher interest rate on the loans.


Opening our doors in 1994, TFC Title Loans is the oldest title loan lender in the state of California. We are extremely passionate about helping those in need to find financial assistance when and where they need it in the states of New Mexico, California, and Arizona. So, Are Title Loans Bad?


Disadvantages of Title Loans

  • High-Interest Rates: Because of the higher risk for the lender when giving money to a borrower with a lower credit score, title loans need to charge higher interest rates to match the increased risk. This means you would like to pay more interest on a title loan than you would an unsecured bank loan.
  • Repossession Is Possible: Since your car is used as collateral for your title loan if you were to default on the loan, the lender would be required to repossess your car in order to be paid back the full balance of the loan.
  • Short Loan Terms: Maty Car Title Loans out there have shorter loan terms and payback schedules when compared to other loans. There are a few lenders that require payments be made in only a few months.
  • Unexpected Fees: There can be high fees for missed or late payments and those can stack up over time making it very difficult to pay off the loan completely. There are a few lenders who even charge prepayment penalties so the borrower is unable to minimize their loan’s interest.



How TFC Minimizes the Disadvantages

  • Sliding Interest Scale: We have a title loan product which can minimize the disadvantage of higher interest rates called a sliding interest scale which customizes each loans rate to the customer’s unique situation.
  • Excellent Customer Service: If you are concerned about defaulting or missing payments, all you need to do is give us a call and we can help work out a way for you to succeed in paying off your loan.
  • Longer Loan Terms: We customize each of our customers’ loan terms and payment schedules with longer timelines of 24 to 36 months, making the payments exceedingly more affordable.
  • No Prepayment Penalties: Here, at TFC Title Loans, we charge absolutely no prepayment penalties whatsoever so you can feel free to pay off your loan as early as you like to avoid the acquirement of interest.


If, after reading this, Are Title Loans Bad, you are left with any questions regarding the disadvantages of car title loans then give us a call and we would be happy to answer them. However, if you are ready to get started with your title loan application then fill out the online form today! Learn more at

Frequently Asked Questions
Are title loans bad?

Title loans are great for making money in a hurry because you get money quickly and keep your car. No company can match TFC Title Loans when it comes to low interest rate fast cash for any situation.

Do car title loans work the same as home title loans?

Yes, both title loans are given based on the value of the owned property.

Can I get a second car using a title loan?

Absolutely. The key is using the first car's title to put a down payment on your next vehicle. You can build a car collection quickly using this strategy. If you have any questions about which new or classic cars to buy, ask TFC Car Title Loans.

How Much Cash Can i Get?

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