What is a title loan and how exactly do they work?

A car title loan is a loan based on the value of your car, truck, van or SUV. These loans typically have minimal credit requirements and supporting documentation is very basic. This makes it a great alternative for those with low credit scores or just need money fast. Your lender will hold the “pink slip” or title to your vehicle but you will be able to keep driving the car while paying your loan back. Interest rates are typically higher than a standard bank loan because there is a higher risk of default but compared to the cost of a returned check and many payday type loans the cost of a title loan can be much cheaper.