There are a lot of misconceptions about title pawns. Some people think that they are a scam, while others think that they are the only way to get money in a hurry. When most people think of title pawns, they likely have a few preconceived notions about how they work.

The first thing you need to understand is how a title pawn works. A title pawn is a loan where you use your car as collateral. You borrow a set amount of money, and then you have a certain amount of time to pay it back. If you fail to pay it back, the lender can take your car. 

Truthfully, there are some myths floating around about title pawns that just aren't accurate. Let's take a look at some of the truths about title pawns and dispel some of the myths. 

The Truth About Title Pawns

First and foremost, let's start with the truth about what a title pawn is. A title pawn is essentially a short-term pawn using your vehicle as collateral. You can typically borrow anywhere from $100 to $10,000, depending on the value of your vehicle. The pawn term is usually 30 days but can be extended if needed.

Another truth about title pawns is that they are a very convenient way to get cash quickly. If you need money for emergency expenses, a title pawn can be a great option. You can use the money for whatever you need - there are no restrictions. 

A title pawn agreement is not a loan agreement. It's simply a security agreement where you provide the lender with certain security (in this case, your car's title). 

Myths About Title Pawns

Now that we've dispelled some of the truths about title pawns, let's look at some of the myths. 

One of the myths about title pawns is that they are a scam and that you can get ripped off. Truthfully, this is rare. If your car is worth more than the money you borrow, the lender will appraise it and return enough to cover the cost of what they gave you as well as some for interest. The company does not put any extra fees on top of what you borrowed like other companies might do. 

Another myth about title pawns is that lenders only give out small amounts of money for them because they don't want to take a chance on customers who aren't going to be able to pay back their loans. Truthfully, there isn't much risk because if someone defaults on their loan, the company gets the title and ownership of their vehicle which they can then resell. 

The next myth is that title pawns are expensive. This isn't always the case. The interest rates on title pawns vary by state, but typically range from 20% to 30%. However, if you compare this to the interest rates on credit cards or payday pawns, it is quite reasonable. 

Another myth about title pawns is that they aren't good for your credit. Truthfully, this depends on how you use the pawn and whether you repay it as agreed. A general rule of thumb: if you don't pay your title pawn back on time, it will appear on your credit report and chip away at your credit score. 

This last myth we'll look at is that title pawns are bad for your car's value. When you take out a title pawn, the amount of money you are borrowing only represents a small fraction of the vehicle's value. Therefore, taking out a pawn won't hurt the value too much, provided you make regular payments to repay the debt. 

So, title pawns are not a scam, and they aren't just for small loans. In fact, many people use them to get money for things like car repairs or medical bills. If you need money quickly and have a car that you can use as collateral, a title pawn might be the right option for you. Just be sure to research your options and compare rates so that you can find the best deal possible. 

Depending on your location there could be a title pawn company near you. For those located near Pensacola, FL there are title pawn options for you.