How to Get Out of a Car Title Loan and Keep Your Car

Q: 1. How much can you borrow with a title loan?

You can borrow from $100 to $10,000, depending on the value of your vehicle and the lender's policies. The loan amount is usually a percentage of the car's resale value, often 25% to 50%.

Q: 4. Can your car be repossessed if you don't pay a title loan?

Yes, if you don’t repay a title loan, the lender can repossess your car. They will likely sell it to recoup their losses.

Editorial note: Here at MoneyFor, our goal is to help you make informed financial decisions. We are committed to accuracy and impartiality in all our content. It’s important to note that articles may reference products from our partners who compensate us. This influences which products we feature and their presentation on our site, not our evaluation.

Key takeaways

Car secured loan using your vehicle titles are expensive and risky. They have high fees and short repayment terms that can trap borrowers in debt.
You can get out of a secured loan using your vehicle title by paying it in full, refinancing with a more affordable loan, or negotiating with the lender.
When you default on a secured loan using your vehicle title, you risk losing your vehicle and negatively impacting your credit score.

are easy to get into but tough to get out of. They are expensive and difficult to pay off. If you roll over the loan, it can cost you a lot. If you default, you risk losing your car.

Ideally, you’ll pay the money back in full and be done with it. Not everyone has the resources to do that. Luckily, there are options for getting out of debt fast and saving hundreds, if not thousands.

We’ll review how you can legally get out of an auto secured loan using your vehicle title and keep your vehicle.

What is a car secured loan using your vehicle title?

A vehicle secured loan using your vehicle title is when you borrow money against your car. It is a that uses your car, truck, motorcycle, or any other vehicle as collateral. Lenders usually do not require a credit check, but you must own the vehicle outright and agree to an inspection. Once approved, you’ll receive a lump sum of cash that is 25% to 50% of the car’s market value.

The problem is that these loans are expensive and usually have short repayment periods of only 15 to 30 days. You are required to make a single or balloon payment at the end of the period that includes the fees. Lenders usually charge a financing fee equivalent to a 300% APR (annual percentage rate) plus additional fees. The high fees and short repayment period make them challenging to repay.

If you cannot repay the money, the lender can seize your vehicle and sell it to recoup their losses.

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5 Ways to get out of a secured loan using your vehicle title without losing your car

If you find yourself trapped in a vehicle secured loan using your vehicle title, don’t worry. There are several ways to escape and regain control of your finances.

Pay the loan

The simplest way is to pay back the money. Repayment stops interest from piling up and ensures you keep your car. Of course, this is easier said than done. Here are a few ideas to round up extra cash:

Take on a side gig: Working for apps like TaskRabbit, DoorDash, or Uber lets you set your schedule. You can make extra money and use it to pay off your debt whenever you have time.

Ask for a salary advance: Some employers will grant you a portion of your upcoming paycheck early for little to no cost. Or you can use . Be sure to budget for a lower amount next payday.

Sell valuable items: Selling used items or valuables can help you raise the necessary cash. Facebook Marketplace and Craigslist make it easy to sell items online.

Get a credit card temporary balance boost: You can use your credit card to withdraw cash up to a specific limit. Temporary balance boosts come with high interest rates plus extra fees and can get expensive fast. Still, they can save your car. Make sure you pay the money back as soon as possible.

Ask a loved one for help: This may be the cheapest solution if you have friends or family who can lend you the money. Always write down the loan terms, any interest, fees, and when you’ll pay it back. Communicate openly to avoid straining relationships.

Refinance the car secured loan using your vehicle title

Another option is to take out a personal loan with a lower interest rate and longer repayment terms. Then, you can use the money to pay back your lender. doesn’t solve the main problem- being short on cash – but it can save you thousands.

An unsecured installment loan from a bank, credit union, or online lender should be much less expensive than rolling over a secured loan using your vehicle title. The monthly payments should put less of a strain on your budget than the single balloon payment.

Look into online lenders that offer . These lenders may not do a credit check; if they do, they will emphasize your employment status, education, and debt-to-income ratio more than your score. While the APRs on these loans will likely be high, they should be lower than what car title lenders charge.

are another way to refinance if your credit is poor. Certain federal credit unions offer PALs as a lower-cost option compared to short-term loan due on your next paydays. You can take out $200 to $2,000 and have one month to a year to pay the money back. Application fees are capped at $20, and the APR cannot exceed 28%. The one catch is that you must be a credit union member for at least a month to apply. Credit unions are often worth joining as they are nonprofit institutions.

Refinancing with a lower-cost loan will be less expensive than rolling over your loan and paying additional fees.

Negotiate more favorable terms

Contact your secured loan using your vehicle title company to see if they can offer more manageable terms. Ask if they can lower your interest rate, reduce the monthly payments (if applicable), or extend the repayment period. Only extend the repayment period if you can also lower the interest rate. Otherwise, you’ll end up paying more over the life of the loan.

For negotiations to work, you must demonstrate that you cannot repay the money. Sometimes lenders will work with you to ensure they get paid rather than have you default.

If your lender agrees to negotiate, ensure you can afford the new terms. Don’t agree if you can’t make payments, as they might not be so generous the second time around. Always get the new secured loan using your vehicle title agreement in writing.

Try debt settlement

If you cannot afford to pay the loan in full but can pay part of it, your lender may agree to a settlement. They will be more willing to agree if you’ve already missed payments. Offer what you can afford to pay and see what the lender accepts. There are no guarantees with debt settlement; it all depends on your lender’s policies and your financial situation.

Approach this option carefully, as it can impact your credit score. If the lender accepts the settlement, they will report your debt as ‘settled for less.’ The negative mark will stay on your credit report for up to seven years. It will drag your score down and make other lenders wary of working with you.

Debt settlement isn’t free. The IRS considers any forgiven debts over $600 to be taxable income. You may be able to get out of paying extra income tax if you don’t have enough money. But talk to a tax professional first.

When you miss payments, whatever you do, do not ignore or avoid your lender. Doing so will undoubtedly lead to vehicle repossession. While debt settlement can hurt your score, it can also get you back on stable ground.

if you have a stable income and can repay your debt another way? Probably not. If you need help, consider reaching out to a debt settlement company. Always do your research and ask before you commit.

File for bankruptcy

can offer limited relief for secured loan using your vehicle titles. It will not discharge your debt because it is secured, but it can make it easier to pay off.

You will have to declare Chapter 13 bankruptcy. Chapter 7 bankruptcy is only for unsecured debts, so your secured loan using your vehicle title is not eligible.

In Chapter 13, you restructure your debts through a court-approved repayment plan. These plans last three to five years, giving you a more extended pay-off period and potentially a reduced rate. You make payments to the court-appointed trustee, who then distributes the money to your creditors. In this plan, you repay your secured debts first and then any unsecured debts. Once the plan is over, the remainder of your unsecured debts will be discharged.

When you file Chapter 13, an automatic stay goes into effect. The automatic stay prevents the lender from repossessing your vehicle even if you’re behind on payments. You can then pay off the loan balance through the repayment plan.

Bankruptcy is not something to be taken lightly. You will get out of debt and receive a fresh start, but at the cost of your credit score. Chapter 13 bankruptcy stays on your credit report for up to seven years. It will drop your score by at least 100 points and make it difficult to borrow in the near future.

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Seek help from credit counseling services

Nonprofit credit counseling agencies can provide expert advice on managing your debt, help you create a realistic budget, and offer financial counseling, often for free. Talk to a certified credit counselor about your .

You can enroll in a if you also have multiple unsecured debts. DMPs roll your unsecured debts into one with a lower, affordable monthly payment. The credit counselor negotiates directly with your lenders to secure lower interest rates and waive fees. You then make one monthly payment to the credit counseling agencies that distribute the money among your lenders.

While auto secured loan using your vehicle titles are secured and not eligible, a DMP can still help you. You can better repay your unsecured debts, potentially freeing up money to pay your title lender. A better budget can also help you locate extra cash that can go into repaying your secured debt.

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What happens if you default?

When you default, the lender will report the missed payments to the credit bureaus. Adding missed payments to your credit report can potentially drop your score by 100 points. They may also send the debt to collections. Having a on your credit report further damages your score.

Besides lowering your credit score, the secured loan using your vehicle title company can repossess your vehicle. They will likely sell it to recoup their losses. If the sale of the car does not cover the full amount you owe, you may be required to pay the difference, called a deficiency balance. On the other hand, if the lender gets more for the car than you owe them, they may have to pay you the surplus money. The exact laws vary by state. Either way, you can easily lose your car.

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Why you should avoid auto secured loan using your vehicle titles

Auto secured loan using your vehicle titles might seem like a quick solution for cash, but they come with significant risks. They are expensive and have short repayment terms. The high fees, coupled with the single balloon payment, make them challenging to pay off in time.

Most lenders will charge a financing fee that is 25% of the amount you borrow. If you with a 25% financing charge, you’ll owe $2,500 plus any additional fees the lender tacks on.

Often, borrowers need to roll over the loan. The lender will charge you an additional financing fee when you roll it over. Say you extend your original $2,000 loan by another 30 days. The lender will tack on another $500 plus any other fees they may charge. In the end, you will have to pay at least $3,000. Rolling over or extending loans can easily trap you in a cycle of debt.

If you are unable to pay, you risk losing your car. The Consumer Financial Protection Bureau found that one-in-five auto secured loan using your vehicle title borrowers have their vehicles seized. Losing access to a vehicle can lead to a whole host of other problems. Avoid short-term, high-interest loans whenever possible.

Think you may lose your ride?

5 Alternatives to car secured loan using your vehicle titles

If you’re thinking, , but want to avoid the high interest rates and risk of car secured loan using your vehicle titles, you’re not out of options. Plenty of unsecured loans are safer and less expensive than secured loan using your vehicle titles. Here are five alternatives that can help you access cash quickly.

Personal loans

Less than ideal credit personal loans are available from online lenders, banks, and credit unions. Although rates may be higher for those with poor credit, the terms are usually more manageable than a secured loan using your vehicle title. You will likely receive a fixed interest rate under 36% APR and repay the loan over a few months to a few years.

These loans are unsecured, so you don’t risk losing your property. A lot of lenders will also report payments to the credit bureaus. On-time payments can help improve your score over time.

You can apply with a cosigner with good credit to increase your chances of approval. A cosigner agrees to make payments if you default, but will not have access to the funds. Their presence reassures the lender that they will receive their money. They are more likely to approve your application with better terms.

Peer-to-peer loans

Peer-to-peer (P2P) loans are personal loans funded by individual investors through online platforms instead of traditional banks. You apply online, and if approved, your loan is listed for investors to fund. With one application, you can contact multiple lenders, like with a loan marketplace.

P2P loans often offer competitive interest rates, even for those with fair credit, and fixed monthly payments. They’re a popular alternative for borrowers seeking flexible terms and funding in a timely manner without going through a bank.

Payday alternative loans

are only found at specific federal credit unions. They are designed to be affordable, short-term loans for less than ideal credit. Federal regulations cap the application fee at $20 and the interest at 28% APR. Approval is based more on your income than your score. They are a good substitute for .

You will have to be a member of the credit union for at least one month to qualify. The good news is that credit unions are easy to join and offer other low-cost personal loans and credit builder loans.

Paycheck advance

A is when you borrow small amounts from your next paycheck, often with no interest charges apply and few fees. Check with your HR department to determine if your employer offers this service.

If they do not, you can use an earned wage access app. These apps may charge a small fee or subscription, but they are far more budget-friendly than secured loan using your vehicle titles. You will likely have to link your bank account and electronic timesheet to the app so it can determine how much you’ve earned. The app will then advance the wages you have earned, but haven’t been paid yet.

The advanced amount is automatically deducted from your next paycheck, whether you use an app or go through your employer. Some apps have safeguards in place to protect against overdrafting your bank account. Other apps let you adjust the payment due date. Either way, you will need to budget for a smaller payday.

Borrow from loved ones

While it may be uncomfortable, borrowing from friends or family can be the most affordable and fastest option. You avoid interest and fees, and can often work out a flexible repayment plan.

Be sure to agree on clear terms to avoid misunderstandings and strain on the relationship. Write out a loan agreement that states when you will pay and how. Some people choose to receive services like babysitting as payment instead of cash.

When used responsibly, borrowing from loved ones can provide relief without long-term financial damage.

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Frequently asked questions

1. How much can you borrow with a secured loan using your vehicle title?

You can borrow from $100 to $10,000, depending on the value of your vehicle and the lender’s policies. The loan amount is usually a percentage of the car’s resale value, often 25% to 50%.

2. How to get out of secured loan using your vehicle title debt?

Consider refinancing with a traditional loan that has a lower interest rate and more affordable payments. You could also negotiate better terms or a lump-sum payment with the lender.

3. What happens if you don’t pay a secured loan using your vehicle title back?

If you can’t pay, the lender can seize your car and sell it. They may also report your account as defaulted, damaging your credit.

4. Can your car be repossessed if you don’t pay a secured loan using your vehicle title?

Yes, if you don’t repay a secured loan using your vehicle title, the lender can repossess your car. They will likely sell it to recoup their losses.

Bottom line

Car secured loan using your vehicle titles help you get cash in a hurry, but aren’t a long-term solution. Your best bet is to pay the money back as soon as possible. If you can’t afford to, you’ve got a few workarounds. Request better terms from your lender. Refinance the loan with lower interest rates and fewer fees. Seek help from credit counselors who are trained in managing debt. Potentially even declare bankruptcy. You can prevent repossession and get out of debt with a bit of work and strategic planning.

Once out of debt, stay out. Adjust your budget so that you don’t need to take out another expensive short-term loan. Work on to get better financing options next time you need to borrow. Put money aside every month in an emergency fund. Ideally, you will have three to six months of living expenses saved up. An emergency fund can serve as a safety net so you will not have to borrow the next time an unexpected expense comes up.

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43. Not affiliated with Empower Annuity Insurance Company of America (www.empower.com). Not everyone will qualify. Offers range from $10-$300 for first-time customers; $10-$400 for all others. Offers are based on our eligibility requirements and can go up with on-time payments. In Feb 2025, the average offer was $95 for first-time customers; $187 for all others. Instant delivery is optional—see fees in Empower’s Terms. Empower offers a 14-day trial for first-time customers followed by an auto-recurring $8/month subscription fee. Cancel anytime.

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Rachel Alulis

Rachel Alulis has been the lead editor for Moneyfor's credit cards team since 2015 and for the financial rewards team since 2023. Before joining Moneyfor, Rachel worked at USA Today and the Des Moines Register. She then established a successful freelance writing and editing business specializing in personal finance. Rachel holds a bachelor's degree in journalism and an MBA.

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How to Get Out of a Car Title Loan and Keep Your Car

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