NEW YORK CITY, NY / ACCESS Newswire / July 22, 2025 / Title loans are short-term loans often advertised as a fast way to get money, even if the borrower has less than perfect credit. While the borrower does not need to hand over their car to receive funds, the lender still holds the title and could repossess the car if payments are missed.
Keep reading to learn how title loans in Greenville, South Carolina, work and other options that may be available before moving forward.
What is a title loan?
A title loan - also called a car title loan or pink-slip loan - is a short-term loan that uses a car title as collateral. Collateral is something of value that someone owns, like a car or a house, used to back a loan. If the borrower doesn't repay the loan, the lender has the right to take the collateral.
In the case of a title loan, the lender holds the borrower's car title as a promise to pay back the money. The borrower generally does not have to surrender their car unless they miss payments.
Title loans may not offer large borrowing amounts, but they come with very high interest (cost of borrowing money), which could make them hard to repay. Some title loans charge an annual percentage rate (APR) of over 300%.
Pros and cons of title loans
Title loans are commonly used by those with lower incomes or credit scores who may not qualify for traditional financing, but they're risky because they often have unfair terms. Borrowers should carefully consider the pros and cons before committing to a title loan.
Pros
Fast access to money: Many title loans are approved and funded the same day.
Access to the vehicle: Some lenders hold the vehicle title while the borrower continues using their vehicle until the loan is repaid.
Flexible amounts: The amount that is loaned will depend on the value of the car.
Cons
High interest rate: Title loans often have a much higher interest rate than other types of loans.
Short repayment window: Loans are typically due within 30 days, which can be hard to manage.
Late payments escalate quickly: Missing a payment by just a few days typically leads to extra fees or losing the vehicle, depending on the terms established by the lender.
Risk of losing the vehicle: If a borrower can't pay the entire loan back on time, even if they have been making partial payments, the lender may repossess the car to recoup their losses.
Invasive technology: Some lenders may use GPS tracking or install a tool to prevent a vehicle from starting, making it easier for them to seize the vehicle if the borrower fails to pay.
Loan rollover traps: If the borrower is unable to repay the full loan amount, it's common for the borrower to renew the loan with new fees, which leads to a cycle of debt that can quickly become harder and harder to get under control.
Alternatives to title loans
Consider exploring some alternatives to title loans that may come with less risk for the borrower.
Personal loan: A personal loan is a lump sum of money provided to the borrower by banks, credit unions or online lenders. When they qualify for the loan, the borrower receives the money upfront, often right away, and repays it in fixed monthly payments with interest. There are two basic types of personal loans: secured and unsecured. A secured loan requires the borrower to promise the lender that they will provide something of value that they own as collateral if they fail to pay back the loan. Depending on the collateral, a secured loan could have a lower interest rate, require lower monthly payments, and potentially result in a larger borrowing amount. An unsecured loan won't need collateral, but depending on the lender's policies and the applicant's credit score, credit history and income, it may come with a higher interest rate.
Credit card: If someone already has a credit card, it could be used to pay for an emergency expense. Unpaid balances of credit cards are often subject to high interest rates, but in many cases, not as high as the interest rate charged by title loan lenders. Plus, because credit cards are a form of unsecured credit, there's no need to risk the title to a car.
Emergency assistance program: Local nonprofits and community organizations may be able to help during financial emergencies. Emergency assistance programs might provide support without the steep costs and risks of a title loan.
Borrowing from family or friends: Reaching out to friends and family for support could be a helpful and lower-cost way to get through a tough time. That said, it's essential to be honest and create a written agreement to document the terms of a loan received from a loved one. Money is often a sensitive subject, and loans from family and friends could risk harming the relationship.
Title loans require careful consideration
A title loan may seem like an easy fix when money is tight, but it comes with big risks. A car is more than just a way to get around - it's often a lifeline. So, before signing any loan papers, it's smart to read the terms carefully and ask questions. Look at other options like a personal loan, a credit card, help from local organizations or your loved ones.
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About OneMain Financial
OneMain Financial is the leader in offering nonprime customers responsible access to credit and is dedicated to improving the financial well-being of hardworking Americans.
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Sonakshi Murze
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SOURCE: OneMain Financial
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