by 
The Curious Bag
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When you are in a budget crunch, car title loans can provide much-needed cash in exchange for using your paid-off car for collateral. But, before you borrow money using this type of loan, be certain that you understand the benefits, limitations and other considerations.
Significance
According to Title Max, a car title loan is a short-term arrangement that is secured by your car. In order to get this type of loan, your car must be paid off and lien-free.
Function
Car owners often seek title loans when they need cash immediately. To get this type of loan, a car owner typically will need to complete a loan application, provide proof of ownership, show proof that the car is paid off and have the car appraised.
Time Frame
Car title loans can be approved within one hour if you have provided all paperwork and your car has met appraisal requirements.
Benefits
One of the main benefits of getting a car title loan is that you can get the needed money and still drive the car you have used as collateral. In addition, loan approval is based on your car's appraised value and not your credit history.
Warning
Interest rates on title loans are higher than those for bank loans. In addition, if you are late on your payments, the loan company has the right to repossess your car.
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