Title Loans vs. Registration Loans

2 min


If you need money right away and have a car, you may be wondering if you should get a title loan or registration loan. Both of these loans offer a way to get fast funding using some aspect of your car to secure the loan, but there are a few differences between the two options. Let’s dive deeper into what online title loans and registration loans are, and how they differ from each other.

What is a Title Loan?

A title loan is a secured loan that lets you use your car as collateral to get funds. You can receive a loan amount of up to 50% of your vehicle’s appraised value, and you can continue driving your car while you repay the loan. Most title lenders require you to own or have equity in your vehicle. If you get approved, the lender will hold onto your title as you make loan repayments. 

What is a Registration Loan?

A registration loan is a secured loan that uses your car’s registration as collateral, so you may be able to get approved without owning the car outright. The lender will decide on a loan amount based on factors like your vehicle’s value and your income. Just like with title loans, you can continue driving your car as you repay the loan.

Differences Between Title Loans and Registration Loans

Eligibility Criteria

Title loans require you to own your car outright or have equity in your car to qualify, while registration loans don’t. With a registration loan, you just have to have the registration under your name.

Loan Amount

Title loans have larger borrowing limits than registration loans since you have to own your car. You may be able to receive a title loan amount worth 25 to 50% of your vehicle’s appraised value.

Interest Rates

Registration loans can come with higher interest rates, since they don’t involve using your car as collateral.

Repossession Risk

While the lender can repossess your car if you don’t repay a title loan, registration loans don’t come with repossession risk since you’re not using your car as collateral. But they may come with other risks if you default, such as the lender sending collections after you or suing you for the remaining balance.

The Bottom Line

Since title loans can come with lower interest rates and higher borrowing limits, they may be the right option for you if you own your car outright. But if you don’t own your car and need money fast, you may want to consider getting a registration loan. Do your research and compare lenders and loan terms to find the best option for your situation, and make sure you can repay the loan before applying.

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