A title loan is a type of credit where you use your car title as collateral for the money given. These are short-term loans that have high interest rates and the lenders don't always check your credit but instead consider the value of your car to give you the loan. The process usually takes 15 minutes to complete and the amount of money you can borrow ranges from $100 to $10,000. The interest rate on them range from 36% to 100% depending on the lender and state requirements on how much interest lenders can charge.

When you visit the title loan company, bring your car along with the car's title. When you fill out the application, you'll need to present verification of your income and proof of residence. Before you sign the contract you should read the terms carefully and ask questions if you're unsure of certain terms in the contract.

Once you pay for the document transfer fees and receive the money, you should pay down the debt as soon as possible and if you're struggling to repay the note, contact the lender at least three weeks before the due date of the loan. Some lenders will extend the due date of the loan to give you more time, but if you fail to repay the loan after the extension, the lender has the legal right to repossess your car.

If you want to reclaim the title of your car, call the lender and find out how much you owe on the loan. After you do this you'll need to bring a cash payment to the company who initially lent the money. The lender will then give you a document stating that you repaid the balance lent to you. Take this document with the car title to the Department of Motor Vehicles and they'll return the title of the car back to you.

Before you search for a title loan company, you should research your state's laws because as of now only 16 states in the U.S. allow these types of financial notes and the states which allow them have certain limits on how much interest lenders can charge borrowers. If your state doesn't allow title loans, you can apply for an online title loan but you should research them before getting the loan.

Here is what happens if your car gets damaged and you have a title loan. If your car is damaged beyond repair, then your insurance company will pay on the loan. If you don't have insurance then you'll still be responsible for paying the title loan. If you need assistance with repaying the loan after your car is damaged, you should meet with the lender to discuss payment options.