Motorcycle Title Loans in the US

What is a motorcycle title loan?

A motorcycle title loan, also known as a motorcycle title pawn, is a type of secured loan that allows individuals to use their motorcycle as collateral to borrow money. In this arrangement, the borrower temporarily hands over the title of their motorcycle to a lender in exchange for a loan amount, typically based on the motorcycle's value. The borrower retains possession of the motorcycle and can continue to use it while repaying the loan.

Features

Use of Motorcycle as Collateral. The borrower uses their motorcycle as collateral for the loan, allowing them to access funds while retaining possession of their motorcycle.
Lien-Free Title. The motorcycle's title should be free of any existing liens or outstanding loans. The borrower must own the motorcycle outright.
Quick Cash Access. These loans provide a relatively fast and convenient way to access cash, making them suitable for individuals needing immediate financial assistance.
No Credit Check. Many motorcycle title loan lenders do not perform a traditional credit check, making it accessible to individuals with poor or no credit history.
Short-Term Nature. These loans are typically short-term, with repayment periods usually ranging from 30 days to a few months.
Risk of Losing the Motorcycle. If the borrower fails to repay the loan as agreed, there is a risk of losing the motorcycle as the lender can take possession of it to recover the amount owed.
Government Regulations. These loans are subject to state regulations, and the terms and availability can vary depending on local laws and restrictions.

Pros and cons

Pros

Fast Funding. Typically, you can get your title loan in as little as 30 minutes if you apply in person.

Lower APR Than Other Short-Term Loans. While still costly, title loans typically are less expensive than payday loans.

Cash Loan Options. You might not need a bank account to get a motorcycle title loan.

All Credit Types Accepted. Good credit is not required to qualify for a motorcycle title loan.

Cons

High APRs. Motorcycle title loans typically have APRs in the ballpark of 300%, making them relatively expensive forms of borrowing.

Possible Cycle of Debt. Most single-payment title loan borrowers have to renew their loan at least once, doubling up on interest and fees and potentially getting caught in a cycle of debt.

Motorcycle at Risk. If you can't pay off your loan, your lender can repossess your motorcycle to cover what you owe.

Not Available in All States. Title loans aren't legal in all states, so this option might not be available to you. Other states regulate title loan providers. To avoid predatory lenders, read up on your state's laws before you apply.

How to get a motorcycle title loan

Apply

Get an estimate of how much your bike is worth. Start by getting a ballpark idea of your motorcycle's value. This information will help you determine how much you can borrow. Keep in mind that most lenders won't disclose the exact percentage of your motorcycle's value you can borrow against until after you apply.
Compare lenders. When comparing different title loan providers, make sure they accept motorcycle titles as collateral, as not all lenders do. Additionally, pay attention to the Annual Percentage Rates (APRs) these lenders offer. The loan term is essential, as a longer term can result in more interest charges over time.
Start the application. Title loans, including motorcycle title loans, are typically easier to qualify for compared to traditional personal loans. You can apply for a motorcycle title loan online.
Bring your motorcycle and documents to a location. While some states allow you to get a title loan online, it's more common for lenders to request an in-person visit. During this visit, you'll submit your required documents, have your motorcycle inspected, sign the loan agreements, and receive your cash. Typically, this process can be completed in about 30 minutes if there's no waiting in line.
Drive away with your funds — on your motorcycle. It's important to note that your motorcycle title is used as collateral, not the motorcycle itself. Therefore, you can continue to use your motorcycle even after you've obtained the loan.

Requirements

Name, valid ID and SSN. You'll need to provide your full name, a valid government-issued ID (such as a driver's license), and your Social Security Number.
Age. In most cases, you must be 18 years of age or older to qualify for a motorcycle title loan, but this requirement may vary depending on your state's regulations.
Contact information. Lenders will require your contact information, including your phone number and email address.
Proof of address. You may need to show proof of your current address, such as a utility bill or a lease agreement.
Proof of income and bank statements. Lenders want to verify your ability to repay the loan. Proof of income, such as pay stubs or bank statements, is typically required.
Motorcycle make and model. You'll need to provide information about your motorcycle, including its make and model.
Motorcycle mileage and age. Lenders may ask for details about your motorcycle's mileage and age, as this can affect the loan amount you qualify for.
Motorcycle's lien-free title. To qualify for a motorcycle title loan, you must have a lien-free title for your motorcycle. This means that you should own the motorcycle outright, with no outstanding loans or liens against it.

Conditions

Loan Amount. The loan amount you can qualify for is typically based on the value of your motorcycle. Lenders will assess your motorcycle's worth and offer you a loan amount that is a percentage of that value.
Interest Rate (APR). Motorcycle title loans often come with high annual percentage rates (APRs). These rates can vary significantly from one lender to another, so it's essential to shop around for the best rates.
Loan Term. Title loans are usually short-term loans with a typical repayment period of 30 days to a few months. Some lenders may offer longer terms, but this can result in higher interest costs.
Use of the Motorcycle. While you use your motorcycle as collateral, you can generally continue to use the motorcycle during the loan period. However, if you default on the loan, the lender can repossess the motorcycle.
Penalties and Fees. Be aware of any penalties for late payments and additional fees that may apply. These can significantly increase the overall cost of the loan.
State Regulations. State regulations regarding motorcycle title loans can vary. Some states have strict rules and limitations on interest rates and fees, while others may have fewer regulations. It's crucial to understand the specific rules in your state.
Default and Repossession. If you fail to repay the loan, the lender can repossess your motorcycle. They may also charge additional fees for repossession and auctioning the vehicle.

Best places to get a motorcycle title loan

CASH 1 is a well-known lender that offers motorcycle title loans, providing quick access to cash based on the value of your motorcycle.
Premier Title Loans is another reliable option, offering motorcycle title loans with competitive rates and flexible terms.
Titlemax is a widely recognized lender, known for its title loan services. They offer motorcycle title loans with a straightforward application process.
Title Loan Express is a trusted lender specializing in title loans, including motorcycle title loans. They provide an efficient way to secure funds using your motorcycle as collateral.

Ways to receive the money

Check. Some lenders issue a check to the borrower, which can be cashed or deposited into their bank account.
Direct Deposit. Many lenders offer the option of direct deposit, where the loan amount is transferred electronically to the borrower's bank account. This is a fast and convenient way to receive the funds.
Cash. In some cases, borrowers may receive the loan amount in cash, especially if they visit a physical loan store in person.
Wire Transfer. Lenders may arrange a wire transfer of the loan funds to the borrower's bank account. This method is secure and allows for quick access to the funds.

Things to pay attention to

State Permit. It's important to note that state title loan laws vary significantly. Some states permit car title loans at triple-digit APRs. These states include Alabama, Arizona, Delaware, Georgia, Idaho, Illinois, Mississippi, Missouri, Nevada, New Hampshire, New Mexico, Tennessee, Virginia, and Wisconsin. In some of these states, there is no cap on the cost of a car title loan.
Loopholes. Many title lenders may operate in certain states by structuring loans to fall under other state credit laws. For example, they may offer larger title loans in California and South Carolina to circumvent small loan rate caps. In Kansas, title loans can be structured as open-end credit to avoid rate caps. Louisiana allows title lenders to make loans for more than $350 and with terms exceeding two months to sidestep state law restrictions. Ohio may allow title loans to be made under credit services organization or mortgage loan laws, and Florida permits title lenders to operate under the consumer finance law, potentially including additional fees like credit insurance fees.
Interest Rates. Motorcycle title loans often come with very high interest rates. Borrowers should be aware that these rates can be in the triple digits, making the cost of borrowing extremely expensive. It's essential to carefully review the terms and interest rates before committing to a title loan.
Risk of Losing Your Motorcycle. One of the most critical factors to consider is the risk of losing your motorcycle. When you take out a motorcycle title loan, your motorcycle serves as collateral. If you fail to repay the loan according to the agreed-upon terms, the lender has the legal right to repossess your motorcycle. This risk makes it essential to ensure you can comfortably meet the repayment terms.
State Restrictions. Some states have lower-rate caps and may not permit title lending or have title lenders operating within their borders. Be sure to understand the laws and regulations in your state before pursuing a motorcycle title loan.

How to repay a motorcycle title loan?

Pay Online. You can make payments online through your title loan account. Many lenders offer online portals or apps where you can log in and submit your payment using a credit/debit card.
Pay Over the Phone. Another option is to pay over the phone using a credit or debit card. Lenders often provide a customer service hotline for this purpose.
Set Up Automatic Payments. To ensure timely repayment, you can set up one-time or recurring payments from your bank account. This way, your payments are automatically deducted on the specified due dates.
Pay at a Participating Money Transfer Location. Some lenders have partnerships with money transfer locations or retail stores where you can make your payments in person.
Send a Check or Money Order. You can also choose to send a check or money order to the payment processing center. Ensure that you include your account details and loan information for proper crediting.

Alternatives

Bad Credit Personal Loans. Many online lenders like Upgrade specialize in providing loans to individuals with bad credit. They may offer more flexibility in terms of credit requirements and provide competitive rates.
Payday Alternative Loans (PALs). PALs are small, short-term loans offered by credit unions as an alternative to high-cost payday loans. Credit unions, such as Navy Federal Credit Union and Pentagon Federal Credit Union, offer PALs to their members.
Credit Card Cash Advances. If you have a credit card, you can use it to get a cash advance. While this option may have high-interest rates, it can be more cost-effective than title loans. Most major credit card companies, including Visa, MasterCard, and American Express, offer cash advance services.
Installment Loans. Installment loans allow you to borrow a lump sum and repay it in equal monthly installments. They typically have lower interest rates than title loans. Happy Money and Avant are online platforms that offer installment loans.

Editorial opinion

Motorcycle title loans, whether obtained online or in a physical title loan store, have sparked significant debate within the lending industry. Advocates emphasize the swift access to cash, making them an attractive option for those seeking how much cash in a pinch. The appeal is further heightened by their leniency towards applicants with bad credit, making them accessible to a broader audience.

Although motorcycle title loans have numerous benefits, these loans come with noteworthy concerns. The high annual percentage rates (APRs) associated with title loans can place borrowers at risk of falling into a cycle of debt. This financial burden can be particularly challenging for those with poor credit, often forced to consider motorcycle title pawns as a last resort. Additionally, hidden fees and prepayment penalties have raised concerns regarding transparency and fairness.

For those considering a motorcycle title loan, it's crucial to consider the short-term nature of these loans and the potential consequences of not making timely payments. While they offer the prospect of extra cash, the risk of losing your motorcycle is a significant drawback. The decision to apply for a motorcycle title loan should be made after careful evaluation of one's financial situation and exploring alternative options. It is essential to have a clear understanding of the terms and conditions before making a lending decision.

Important

Keeping your Debt-to-Income (DTI) ratio below 30-40% of your monthly income is crucial. This will help you avoid potential financial problems in the future. Additionally, always assess the necessity and feasibility of taking a loan, ensuring you can comfortably manage its repayment.

How to Choose a Lender

Make sure to confirm whether the lender is licensed to operate in your state. You can verify this information with your state regulator or attorney general.
Check if the lender is a member of a reputable association, such as the Community Financial Services Association of America. Membership in such organizations may provide an extra level of reliability.
Carefully review all the terms and conditions of your payday loan contract.
Thoroughly examine the interest rates on payday loans and ensure that your contract includes a detailed breakdown of the total cost of the loan.
Take advantage of your right of rescission. Usually, you can rescind the loan within three days after signing the agreement. Alternatively, there is typically a "cooling-off" period, which allows you several days to thoroughly review the contract before making an informed decision to enter into a consumer loan agreement based on the terms specified by the lender.
Choosing a payday lender is a significant decision that demands careful consideration and a good understanding of how such organizations operate.