- A type of loan that uses an individual's car title as collateral. Title loans are often short-term high interest loans used by people with bad credit. No credit checks are done before the loan is approved; all that is checked is the value of the car. If the borrower defaults on his or her loan, the lender repossesses the vehicle. Title loans are considered by some as an example of predatory lending because of the high interest rates charged. Also known as a "car title loan."
car title loan, auto title loan
Related Terms and Acronyms
- Bad Credit — Definition,
- Someone who carries a higher credit risk.
- Bad Credit Loan — Definition,
- A loan taken out by someone with bad credit.
- Collateral — Definition,
- Any property pledged as security for repayment of a debt.
- Consumer Credit — Definition,
- Loans for personal use as opposed to business or commercial lending. These loans are typically unsecured and not backed by collateral.
- Loan Shark — Definition,
- A lender that provides loans at usuriously high interest rates, often ensuring repayment with the threat of force.
- Payday Loan — Definition,
- A short-term loan with an extremely high interest rate.
- Predatory Lending (PL) — Acronym, Important,
- Lending practices that are unfair, deceptive or fraudulent.
- Secured Loan — Definition,
- Borrowed money that is backed by collateral.
- Unsecured Loan — Definition,
- An advance of money that is not secured by collateral.
- Usurious Rate — Definition,
- An interest rate that is unnecessarily high or well above legal rates. For example, sometimes intangible property taxes are applied to income from usurious rates.
- Usury — Definition,
- Illegal, excessive interest.