Title Loan

A A A

DEFINITION

A loan where an asset is required as collateral. These loans are popular for two reasons. The first being that with this type of loan, the applicant's credit rating is not considered. The second being that title loans can be approved very quickly and for loan amounts as little as $100 in most cases.

INVESTOPEDIA EXPLAINS

The lender will not usually require the actual physical retention of the collateral. Many simply require that they hold the proof of ownership of the asset. For example, in a car title loan, having a second set of keys, a tracking device or the ability to disable the ignition would suffice. However the borrower must hold clear title to the car, with no current financing or liens on the vehicle.


RELATED TERMS
  1. Credit Rating

    An assessment of the credit worthiness of a borrower in general terms or with ...
  2. Lender

    Someone who makes funds available to another with the expectation that the funds ...
  3. Collateral

    Property or other assets that a borrower offers a lender to secure a loan. If ...
  4. Loan

    The act of giving money, property or other material goods to a another party ...
  5. Unsecured Loan

    A loan that is issued and supported only by the borrower's creditworthiness, ...
  6. Secured Debt

    Debt backed or secured by collateral to reduce the risk associated with lending. ...
  7. Car Title Loan

    A short-term loan in which the borrower's car title is used as collateral. The ...
  8. Leveraged Benefits

    The use – by a business owner or professional practitioner – of their company’s ...
  9. Gray Charges

    Fees consumers pay via credit card or debit card for unwanted subscription services ...
  10. Debt Consolidation

    The act of combining several loans or liabilities into one loan. Debt consolidation ...
Related Articles
  1. A Guide To Debt Settlement
    Credit & Loans

    A Guide To Debt Settlement

  2. Promissory Notes: Not Your Average IOU
    Personal Finance

    Promissory Notes: Not Your Average IOU

  3. Payday Loans Don't Pay
    Options & Futures

    Payday Loans Don't Pay

  4. Car Title Loans: Good Option For Fast ...
    Options & Futures

    Car Title Loans: Good Option For Fast ...

  5. What is the difference between asset-based ...
    Investing

    What is the difference between asset-based ...

  6. 5 Things You Shouldn't Do During A Recession
    Budgeting

    5 Things You Shouldn't Do During A Recession

  7. How To Reduce Holiday Debt
    Credit & Loans

    How To Reduce Holiday Debt

  8. What's considered to be a good debt-to-income ...
    Credit & Loans

    What's considered to be a good debt-to-income ...

  9. When a 401(k) Hardship Withdrawal Makes ...
    Retirement

    When a 401(k) Hardship Withdrawal Makes ...

  10. 3 Dumb Ways to Borrow Money
    Personal Finance

    3 Dumb Ways to Borrow Money

comments powered by Disqus
Hot Definitions
  1. Leased Bank Guarantee

    A bank guarantee that is leased to a third party for a specific fee. The issuing bank will conduct due diligence on the creditworthiness of the customer looking to secure a bank guarantee, then lease a guarantee to that customer for a set amount of money and over a set period of time, typically less than two years.
  2. Degree Of Financial Leverage - DFL

    A ratio that measures the sensitivity of a company’s earnings per share (EPS) to fluctuations in its operating income, as a result of changes in its capital structure. Degree of Financial Leverage (DFL) measures the percentage change in EPS for a unit change in earnings before interest and taxes (EBIT).
  3. Jeff Bezos

    Self-made billionaire Jeff Bezos is famous for founding online retail giant Amazon.com.
  4. Re-fracking

    Re-fracking is the practice of returning to older wells that had been fracked in the recent past to capitalize on newer, more effective extraction technology. Re-fracking can be effective on especially tight oil deposits – where the shale products low yields – to extend their productivity.
  5. TIMP (acronym)

    'TIMP' is an acronym that stands for 'Turkey, Indonesia, Mexico and Philippines.' Similar to BRIC (Brazil, Russia, India and China), the acronym was coined by and investor/economist to group fast-growing emerging market economies in similar states of economic development.
  6. Pension Risk Transfer

    When a defined benefit pension provider offloads some or all of the plan’s risk – e.g.: retirement payment liabilities to former employee beneficiaries. The plan sponsor can do this by offering vested plan participants a lump-sum payment to voluntarily leave the plan, or by negotiating with an insurance company to take on the responsibility for paying benefits.
Trading Center