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Will Inflation Affect my Title Loan?

Inflation and Title Loans

There has been a lot of talk about inflation and with inflation at a recent high it will likely have an effect on many transactions and financial loans. Find out why inflation is rising right now.

More important than why is what does it mean for you? here are a few items that will likely effect your title loan, and ability to repay the loan:

  1. Rising inflation means less income left over to repay loans after purchasing essentials. This can make repaying an existing title loan more difficult
  2. The Federal reserve is raising interest rates to try to tamper inflation. This means the rise in rates will likely cause a rise in all lending rates. This includes credit cards, mortgages, car loans, and title loans.

The fact that you will have to spend more to get the same amount of goods and services means there is less money to cover other expenses. Additionally, if you have credit card debt and those rates rise, then that will exacerbate things even further.

Viscous Cycle of Rising Costs

When inflation is kept in check and wages rise at a similar rate, purchasing power remains similar and workers are usually able to cover the same expenses with no shortfall.

Title Loans to Cover Shortfalls

Title loans are often used to cover short term shortfalls in making ends meet and/or emergency expenses. If this shortfall is cause by the rising cost of goods and services as well as the rising cost of borrowing, then it could result in a title loan that is very difficult to repay. This is especially true if inflation remains elevated or even continues to increase.

In these situations this leaves little left over to cover the repayment of the title loans. This is made worse by rising interest rates that are passed on to title loans making them more costly at the worst possible times.

How to Make sure Inflation doesn’t Cause a Default

It is important to make sure to borrow only what you need and be certain you have the money each month to make at least the minimum payment. Even if you did this when preparing the title loan, things can get off track if your gas bill, food costs, and other expenses rise significantly leaving less to make title loan payments.

What to do if Inflation is Causing Loan Payment Challenges

The first thing to do if you know you are going to either miss, be late, or be short on a title loan payment is contact the title lender and let them know. The worst thing you can do is nothing and hope the lender doesn’t notice.

Try to Work out a Plan to get on Track

If you are only going to miss or be late on one payment, or make one or two partial payments, contact your lender and work out a plan to get your loan back on track. Many lenders are willing to work with borrowers, but they are only able to do so if you communicate your situation to them openly and honestly.

Consider Refinancing the Title Loan

In some cases you may have prepared properly and have been perfectly capable of making all payments on time when the loan was initiated. Perhaps this was before the effects of inflation started to set in.

If this is causing challenges repaying the a loan then consider a title loan refinance. In many cases refinancing the loan can lower payments and save a significant amount of money over the loan term.

Find out How Much a Title Loan Costs

Finding out how much title loan costs, both new loans and refinances, is an important part of determining whether or not one is affordable. This is more important now with inflation on the rise. To calculate a title loan and compare two different loans simply use the car title loan calculator.


Inflation does have an affect on your ability to repay a title loan. This includes both direct effects and indirect effects. These can often be compounded by the fact that:

  1. Purchasing power is less – meaning you have to spend more to acquire the same amount of goods and services. This means you’ll pay more for groceries and gas, among others, reducing the money available to repay the title loan.
  2. Lending costs rise – interest rates rise meaning lending costs also rise. This means that credit card interest payments, car loan payments, and other loan payments mat increase; leaving less money leftover to cover title loan payments.

It is important to determine what type of effect this will have on your ability to repay the title loan on time and, if there is a problem, notify the lender to work out a solution. If that is not an option then a title loan refinance may be an option worth looking into.