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Definition of Title Loan

Title loan

Title loan also called an auto title loan, pink slip loan or car title loan, is a type of secured loan where the borrower can use their vehicle title as collateral. Borrowers must allow a lender to place a lien on their car title and temporarily surrender the hard copy of their vehicle title, in exchange for a loan amount. When the loan is repaid, the lien is removed and the car title is returned to its owner. If the borrower defaults on their payments then the lender is liable to repossess the vehicle and sell it to repay the borrowers’ outstanding debt. Interest rates routinely run over 500%.

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Posted June 2015