Joker wrote: In many ways, I think that the title loan industry is worse than the payday loan industry. Unless you are lucky enough to be in a state that limits the amount these types of companies can charge you, they will not only charge huge interest rates but take your only car as well. Not a very nice industry, however, I understand it is very lucrative.

That is interesting, I was not aware of that at all. I always thought they were lower rates given you have collateral behind the loans. Although I guess the collateral is a car which declines in value so fast.

In many ways, I think that the title loan industry is worse than the payday loan industry. Unless you are lucky enough to be in a state that limits the amount these types of companies can charge you, they will not only charge huge interest rates but take your only car as well. Not a very nice industry, however, I understand it is very lucrative.

Is this similar to the payday loan industry? Are they run by the same people? If I needed to borrow a small sum like the value of my car, I'd go to the credit union first because they offer me the best rates and are easier to work with in my opinion.

I don't know what state you live in, but here in New Mexico, there are establishments that have what they call "title loans". You take your car to this place and they look at it and if you have a clear title to the car they will loan you money on it. Unfortunately, so states do not have limits on the amount of interest they can charge so they take advantage of people's need to have extra cash and low credit. Credit is not required for this type of loan hence the very high interest rates.

I take it you mean handing the bank a car title and obtaining a loan? Right? How high is the interest rate on something like this? A low interest equity loan might be better depending on the amount of money you need. Or even a second mortgage? Thanks for the warning!

Appreciate the "heads up"!

Believe me when I tell you that these can really put you under the bus if you are not careful. The only way to stay above water with title loans is to pay if off on the first payment date. The interest rates are so high that if you continue with the payment plan, you will never get out. My husband took out one on our car without my knowledge, luckily I found out in enough time to get to the bank and cover it. In my opinion, this is just an awful way to borrow.