Whats The Difference Between Title Pawns And Title Loans?

Daniel Joelson

Daniel Joelson

Total Posts: 351

Published Date: March 16, 2024

Daniel Joelson has been in the consumer finance space since 1994, he has helped to develop underwriting manuals for the financial sector. With a vast amount of Knowledge in consumer finance, he has been writing articles for all types of loans. With his knowledge, he is able to help many people to answer different financial problems.

Two types of secured loans that use vehicles as collateral are title pawns and title loans. While these terms are sometimes used interchangeably, they actually refer to different loan types with unique characteristics and rules.

What is a Title Pawn?

A title pawn, also known as a title pledge, is a short-term loan where borrowers can access a smaller amount of money using their vehicle title as collateral.

In exchange for the loan, the borrower gives the lender the title to their car. The borrower usually has a brief period to repay the loan, along with interest and fees, or risk having their car repossessed.

title loan and title pawn
Title loans and title pawns

What is a Title Loan?

On the other hand, a title loan is a type of secured loan that allows borrowers to access larger sums of money using their vehicle as collateral.

The borrower retains ownership of their car during the loan term but is required to provide the lender with the car title.

Regular principal and interest payments are made by the borrower until the loan is fully repaid, which can span from 24 month to 48 months.

Differences Between Title Pawns and Title Loans

Although title pawns and title loans both involve using a vehicle title as security for a loan, there are important distinctions:

  • Loan Amounts: Title loans typically allow borrowers to access larger sums of money compared to title pawns.
  • Repayment Terms: Title pawns often have shorter repayment periods, while title loans may offer more extended repayment schedules.
  • Lenders and Regulations: Title pawns are commonly offered by pawn shops and are subject to pawnbroker regulations, while title loans are usually provided by non-bank lenders and governed by state laws.
  • Availability and Credit Requirements: Title loans may be more accessible to borrowers with bad credit, but they often come with higher interest rates and fees compared to title pawns.

Other Names for Title Pawns and Title Loans

These loans can also be referred to by various names:

Choosing Between Title Pawns and Title Loans

Before deciding between a title pawn and a title loan, borrowers should carefully consider the terms and conditions.

It is essential to verify that the lender has a good reputation and a valid operating license in the borrower’s state, and with the CFPB.

Borrowers should weigh the potential advantages and risks and consult a financial expert if needed.

For individuals considering a title pawn or title loan, TFC Title Loans is a reputable broker. We have been helping people since 1994.

By understanding the differences between title pawns and title loans and conducting thorough research, borrowers can make informed financial decisions that align with their needs and circumstances.

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DISCLAIMER: As our policy to make sure you know what we do and what are our limitations, we offer you these disclaimers. We are NOT A LENDER and we do not make short term cash loans or credit decisions. We are a referral service and work only with licensed lenders/brokers.

We may act as the broker for the loan and may not be the direct lender. Loan proceeds are intended primarily for personal, family and household purposes. We do not offer or service student loans.

*Loan amounts by the lenders vary based on your vehicle and your ability to repay the loan.

*Since we do not lend money directly we cannot offer you a solicitation for a loan, except in the state of California. In all other serviced states we WILL match you with a lender based on the information you provide on this website. We will not charge you for this service and our service is not available in all states. States that are serviced by this Web Site may change from time to time and without notice. Personal Unsecured Loans and Auto Title Loans are not available in all states and all areas.

*Auto Title Loan companies typically do not have pre-payment penalties, but we cannot guarantee that every lender meets this standard. Small Business Loans typically do have pre-payment penalties and occasionally will use your car as collateral to secure the loan.

*All lenders are responsible for their own interest rates and payment terms. TFC Title Loans has no control over these rates or payments. Use of the work competitive or reasonable does not mean affordable and borrowers should use their own discretion when working directly with the lender.

*The amount of people who applied for a loan and we helped and those who received a loan is not the same. We cannot guarantee we will find a lender who will fund you.Just because you give us information on this web site, in no way do we guarantee you will be approved for a car title loan or any other type of loan. Not all lenders can provide loan amounts you may see on this web site because loan amounts are limited by state law and/or the lender. Some lenders may require you to use a GPS locator device on your car, active all the time. They may or may not pay for this or charge you for this. This is up to the lender and we have no control over this policy of the lender. Typically larger loans or higher risk loans use a GPS.

*In some circumstances faxing may be required. Use of your cell phone to receive updates is optional.

*Car Title Loans are expensive and you may have other ways to get funding that is less expensive. These types of loans are meant to provide you with short term financing to solve immediate cash needs and should not be considered a long term solution. Residents of some states may not be eligible for a loan. Rejections for loans are not disclosed to our firm and you may want to contact the lender directly.

*Car Title Loan lenders are usually licensed by the State in which you reside. You should consult directly with these regulatory agencies to make sure your lender is licensed and in compliance. These agencies are there to protect you and we advise making sure any lender you receive money from is fully licensed.

*Trading Financial Credit, LLC dba TFC Title Loans, Car Title Loans California, Dineromax. If you are using a screen reader and are having problems using this website, please give us a call at 1-844-242-3543 for immediate assistance.

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