November 18, 2020

Are Auto Title Loans a Good Emergency Loan Option in Texas?

Did your car breakdown? Your roof collapse? Burst pipe? Boiler breakdown?

There are so many emergencies that can pop up anytime and usually they occur when one is short on cash. These emergencies can’t wait and it is often quite frustrating to arrange a large amount of money in such a small amount of time.

It could take a few days or weeks before your next paycheck comes in or, in a worst-case scenario, you might not even have a job.

If you were to go for a traditional loan or a bank loan, there are a few downsides to that.

  1. There is no way you can get the money on such short notice. Bank loans require many days or even weeks of processing and formalities before you get the money in your account.
  2. The list of requirements they ask for is hard to meet when you are already in a financial crisis.

For example, typically traditional banks ask for:

  • Proof of employment: If you don’t have a job, they consider you unlikely to repay the loan.
  • Collateral: This is in case you default, so the bank can seize your property as compensation.
  • Credit score: To get a loan, you need a high credit score, as it shows how responsibly you have made payments in the past.

Some lenders might ask for a cosigner with a good credit score if your own credit history is poor. If you can’t repay the loan, the cosigner will be bound to repay it in your stead.

Simply put, traditional loans are just too hard to acquire. This is where emergency loans come in.

What Is an Emergency Loan?

Emergency loans are quick payment loans that come to your rescue when an unexpected expense arises. Although they essentially get you the money the very same or the next day, some are notorious for having high-interest rates.

Emergency loans include personal loans, payday loans, pawnshop loans, etc. Of special interest to us today are auto title loans in Texas.

Are title loans worth it? In an emergency, yes.

What Are Car Title Loans?

Auto title loans are fast loans where lenders loan you money while keeping your car as collateral. All you need to get an auto title loan in Texas is to own a car or any other vehicle. The car must be completely under your ownership, though. It must not be on the lease or have any other liens on it. It must be 100% owned by you, and you must possess the original car title (car ownership documents issued by the state).

That is the only requirement.

Oh, and you must be over 18 years of age!

Can I Get a Title Loan Without a Job?

You bet you can! If you’re unemployed, a lot of traditional lenders might reject you. You won’t be eligible for payday loans without a source of income either. But title loans are no problem at all.

Can I Get a Title Loan With a Bad Credit Score?

Don’t have a good credit history? Or maybe you just turned 18 and have no credit history at all?

Don’t worry. Most auto title loan lenders don’t even ask to see your credit score. Those that do have a very low threshold. They are there to try their best to give you a loan and not make it harder for you.

Why You Should Consider a Title Loan

There are so many advantages to them:

  • You don’t need to have a job or a good credit history.
  • There are many different lenders for you to choose from in Texas.
  • You can apply for a title loan online!
  • You can get the cash within hours, on the very same day. This is ideal for a medical emergency or an urgent home repair.
  • You get to drive your car. While the term of the loan is ongoing, you will not have to hand over your car to the lender. Your car stays with you and you can drive it wherever you like.

Not only do title loans have all these convenient conditions, but you can use a title loan for so many things.

If you have any bill payment deadlines approaching, old debts to pay off urgently, if you’re out of savings from your old job and need money for basic utilities, if you need a considerable sum of money to invest in a small business—a title loan could cover all of these!

How To Get an Auto Title Loan in Texas?


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Follow these simple steps to get your title loan:

  • Look for auto title loans near you in Texas. Google Maps is a great tool for this or you could do a simple web search. We recommend LoanStar Title Loans for in-store applicants and Titlelo Title Loans for online applicants.
  • After you’ve chosen a lender you like, visit their office. If you wish to apply for a loan online, visit their website.
  • Fill in the application form and attach necessary documents like a copy of your official government-issued ID card, and your car title documents. Most lenders will ask to inspect the vehicle to better understand the true value of the car.
  • Once your application is approved, they will give you the final agreement. Don’t sign unless you are sure.
  • Wait for your cash! You will probably receive the money by the end of the same day.

What Are the Disadvantages of Getting a Title Loan?

As always, there’s a flip side to the coin. Before you go for this type of loan, know the following disadvantages and risks:

  • Title loans charge 25% monthly interest on the principal amount or an annual percentage rate of 300-400%! This is extremely high compared to regular loans. In essence, even though you can get money fast, you pay the price for convenience here.
    • The thing to really consider before you take that loan is that if you are unemployed, repaying that loan, especially with so much interest, would be a daunting task.
  • If you are unable to pay back the loan, the lender will take possession of your car. He or she will then sell it off to get the loan amount plus interest from it. You will lose your car for good then (Some lenders do offer refinances and might help you readjust your payment plan).
  • The loan term Is usually short—just about a month. Your financial state might not have improved by then. Repaying all that money with interest will be a difficult bet.

See even more opinions on the subject in this video.

Alternatives to Title Loans

If you have a good credit score, an unsecured personal loan is an option. It would cost you less than taking out a credit card cash advance, which is another option.

Other alternatives to consider…

Payday loans These are fast loans like title loans. But here, you must have a source of income. Also, you cannot borrow more than you can repay with your next month’s salary. These also charge very high interest, even higher than title loans.
Pawnshop loans perhaps the easiest to get because there is no application process. All you have to do is submit a valuable at the pawnshop to be held as collateral and take your money instantly. They also have high-interest rates compared to traditional loans, an average of 120% APR. Nevertheless, they are generally cheaper than payday or title loans.
Friends and family It’s always a tough thing to do…But the shame of going to a well-off family member will be far less than the shame of declaring bankruptcy from a predatory loan.

If you are confident you will be able to repay it with high interest, a title loan is a fast and easy emergency loan to secure. But the key is to only borrow as much as you absolutely need and not a penny more.

About the author 

Peter Hatch

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