Getting confused when you hear people talk about pawning their car? Well we can understand why. Turns out a title loan and a title pawn are essentially the same thing. Some states refer to this type of secured loan as a title loan while other states refer to it as a title pawn. The reason this is confusing is because people always think of a pawn shop loan that you get on a valuable item like a watch. That kind of pawn is completely different.
A “watch” pawn is where you take your item of value to the local pawn shop, and they offer a cash amount based off its value. There is a catch, though. They hold onto the pawned item until you have the cash to pay back the pawn broker plus a little bit of interest. In Florida, it is limited to 25% interest per month.
The advantage of a pawn is that you do not need a clear car title or even own a car. It is a good short term solution for a small financial need. The keyword here is small financial need. Pawn shops typically do not offer huge amounts of money as loans. There is often a limit that is set, even if the item being pawned is of high value.
On the flip side is the car title loan (or car title pawn, as some people call it), which does not typically have an upper limit. Car title loans allow the borrower to borrow as based on the value of the car. Loans can range from a few hundred dollars to near ten thousand dollars.
The best way to find out how much you could borrow on your car using your car title is to call a title loan company like Embassy Loans. To get an estimate you just need to know the year, make, and model of your car. Provide this information along with your contact information and they can quickly tell you how much money you could potentially borrow.
Of course, the biggest advantage of a car title loan over pawning your watch is that you can continue to drive your car while you still have an active loan account. With a pawn, they hold onto the item until you pay them back. With a car title loan they just hold the car title and you can still keep your car.
The folks at Embassy are happy to help you with all of your questions about auto title loans. Give us a call at 833-839-2274 and we will do our best to help.