Are Title Loans Worth It?

Title loans can be a great option for immediate funding that sever as a solution for many. For others, they can be a poor decision resulting in excessive interest charges. Sometimes these charges can exceed the value of the car, and in worse cases title loans can result in losing the vehicle. So, how do we know if title loans are worth it?

As with all of our articles, we recommend determining if a title loan is worth it based on your specific situation. Some people make excellent candidates for title loans, others do not. The vehicle is also a major factor. If you are new to title loans, it is worth learning how to get a title loan where we discuss in detail how to decide what makes a good candidate. Once you decide that you are a good candidate, you can move on to answer the topic question.

If you are considering a title loan for any reason, you may be asking yourself “Are Title Loans Worth It?”. The truth is, there is no simple answer to this question. Whether or not a title loan is worth it largely depends on two main factors: 1. The cost of the Title Loan, and 2. The benefit you receive. To find out if a title loan is worth it for you, you will need to perform a simple cost benefit analysis of the cost of title loan versus the benefit you will receive.

Are Title Loans Worth It Factor 1 – Cost of the Loan:

Car Title Loan costs can, and do, vary widely, much more so than just about any other type of loan. Some of the higher interest rate loans, like those charged by the largest lenders, are probably not worth it unless you receive a significant benefit that can outweigh the excessive costs . We recently published a detailed title loan costs guide that goes over how much title loans costs with several examples. This will give you a better idea of what title loans costs to help figure out if they are worth it. As a general rule, if the loan costs more than double what you borrowed, it is likely too expensive. And, many title loans cost much more than double, and some even triple the original principal. Our title loans are much cheaper, feel free to use our title loan calculator to get an accurate quote.

Title Loan Cost Example 1:

On the high end of the interest rate spectrum is an example of a 25% per month title loan. For a $2,000 loan, it can cost almost $6,000 to repay. In this case, the loan is most likely not worth it. In fact, most people would wonder why someone would agree to terms like that in the first place.

Title Loan Cost Example 2:

A Title Loan with Fast Title Lenders costs 8% per month. The same $2,000 loan from the previous example would cost less than $3,200 to repay; a fraction of the $6,000. In this case the title loan has a much better chance of being worth it.

Are Title Loans Worth It – Factor 2 – Benefit

The other key factor to determine are title loans worth it is the actual benefit of getting the loan and the specific effect. This will vary based on the specifics of your situation. This will largely depend on the reason for the loan, and how getting the loan will solve a problem. The actual benefits of getting a title loan, with specific effects, can include:

Covering an Emergency Expense

Many borrowers get title loans to cover an emergency expense. This can be very important to some, and can reduce stress and improve quality of life. Quantifying this is difficult, so it is up to you to determine if the benefit you get from a title loan outweighs the costs. This is obviously much easier with a reasonable title loan with the best rate like the Title Loans we provide.

Paying for a Car Repair

Some borrowers get title loans to pay for a vehicle repair. Depending on the specific repair, it may be necessary to continue driving the vehicle. If the borrower uses the vehicle for work, or is the only transportation to and from work, the benefit of having a working vehicle may outweigh the cost of a title loan. Again, this is much easier to do with a low rate title loan.

Reducing Outstanding Debt

Several of our customers got title loans to pay down credit card debt. They did so to increase their credit score prior to making a large purchase. The higher credit score allowed them to get a lower rate on the much larger, longer, loan. This resulted in a significant cost savings.


These are only a few examples, there are many more reasons why people consider title loans. It is important, if you are considering a title loan, to perform a simple cost benefit analysis to determine if a title loan is worth it. In some cases, yes, and in some cases, no. There is no simple yes or no answer for everyone. If the benefit you will gain from the title loan outweighs the cost, then yes, title loans are worth it. One the other hand, the opposite is true. One thing is for sure, if you are considering a title loan you will want to find a lender with the lowest costs.