Will The Title Loan Industry Sink Or Swim In These Times Ahead?

The world is going through some pretty rough times; there’s no doubt about it. In 2020 alone, we’ve experienced intense natural disasters, rising tensions between governments, and even a global pandemic with no clear end in sight.

There seems to be no industry that’s unaffected by these events, least of all the finance and banking industries. Every industry needs to evolve overnight to survive, leaving people wondering where they’ll be in six months or a year from now.

For those in the title loan industry, all of these events beg the question: “Will the title loan industry sink or swim?”

The answer is a straightforward one: it’s going to swim.

And the reason is simple: title loans offer advantages that are desperately needed by those most affected by the pandemic and other dire economic factors.

To gain a better understanding of why the title loan industry will thrive despite the challenges faced by the world, we must go back to square one.

By understanding what title loans are and how they benefit the people who need them the most, it’ll be easy to see why this industry will continue to offer value to people in the future.

What are title loans?

To see where the title loan industry is heading, it’s essential to understand the product itself.

title loan is a financial instrument that allows everyday people to borrow money quickly. All they need to secure the loan is…

  1. The title to a vehicle that they own, which they’ll use as collateral.
  2. Identification
  3. ……Yep, actually that’s it.

Moreover, a reason people love title loans is that they can continue to drive their car while it is being used as collateral to secure the loan!

So, instead of handing their vehicle over to the lender and disrupting their lives further, they’ll still drive to work as they usually would. All the while, they’ll have the money they need while they repay the loan according to the terms of the loan agreement.

What drives demand for title loans?

Title loans are an essential lifeline for the people who rely on them. Aside from being able to continue driving their cars, there are a few key factors that drive the demand for title loans. Here are just some of the ‘pull’ factors that attract people towards using title loans.

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Credit scores aren’t considered

The first factor that drives demand is that lenders are willing to work with people who have bad credit scores. Suppose you were someone who had a bad credit score but needed to borrow money. Mainstream lenders like banks who have conventional loan products would instantly turn you away.

Thankfully, there are other options like title loans that offer you the money you need, right when you need it.

Lenders work with all income types

Demand for title loans is also driven by how lenders are willing to work with people of all income types. Whether they’re from lower-income groups, or if they have irregular incomes, they still have access to title loans all the same. That’s yet another reason why title loans serve as a lifeline for people who need it the most.

Lenders offer quick approval and fast payouts

Most importantly, the entire title loan process is quick and painless. Unlike other forms of loans, the application for a title loan can be completed online with very little information.

Typically, a photo ID and proof of ownership over the vehicle in question is all one needs to start the application process. From there, qualified borrowers typically get their approval within hours, and they’ll receive their funds on the same day as well.

The speed of the transaction, both at the approval and payout stages, is crucial for many borrowers. Even with a good credit score and income, going to a regular bank for a personal loan is not an option. At a traditional bank, the application process is often long and frustrating, involving lots of paperwork.

The simple truth is that some people simply cannot afford to wait for days or even weeks for approval from a conventional lender. That in itself is a strong driver for demand towards the title loan industry.

Title loans come in significant amounts

Another driver for continued demand in the title loan industry is that they can offer attractive amounts to borrowers.

According to the Federal Trade Commission (FTC), borrowers can receive anywhere from 25% to 50% of their car’s value. They add that on average, title loans can offer anywhere from $100 to $10,000 or more, depending on the lender.


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For a borrower in desperate need of a loan, being able to borrow a high amount, especially at the quick speeds offered by title loans, can be a literal lifesaver for many borrowers—mainstream banks just can’t help people who are in a real emergency because there is too much red tape!

These are just some of the ‘pull’ factors that attract people towards title loans, but they only explain part of the demand for title loans. The other part is defined by ‘push’ factors, which are the reasons that people need those loans in the first place.

Why borrowers need title loans

As the world becomes increasingly volatile, some communities are more affected than others. Quite often, they’re communities that do not have access to mainstream institutions like banks and the conventional financial products they offer.

For one, those institutions may not even exist locally. On top of that, borrowers in the community may not fulfill the minimum requirements often posed by those banks, like a high credit score or a certain income level. As a result, these communities rely heavily on alternative financial institutions and products, chief among them being title loans.

Here are some of the reasons that push people to search for title loans.

To keep their businesses afloat

Businesses all around the world are affected by natural disasters and global pandemic. Big companies can survive for much longer through those challenges, but not small and medium-sized enterprises. When these smaller businesses struggle to stay afloat, their owners need title loans to help them stay afloat for as long as possible.

To pay for emergency repairs

Just like the previous point, businesses are struggling to survive. When they experience something like a natural disaster, they’ll need to repair their equipment as soon as possible so that their business can continue operating. A title loan is one way to get a quick injection of funds to make those repairs happen.

To pay for medical emergencies

People struggle to find gainful employment these days, which makes it challenging to maintain or pay for health insurance. When medical emergencies take place, people need access to quick cash to pay for procedures and medications. That’s where a title loan can act as a lifesaver for many people in affected communities.

To buy supplies

Lastly, people in affected communities simply need to buy supplies to survive. While searching for a job or trying to run a business, people need to buy things like groceries and school supplies to keep their families functioning as normal as possible.

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During some of the most challenging times, a title loan can offer a breath of fresh air to keep families going until their finances become much more stabilized.

Final thoughts

All-in-all, the title loan industry will continue to swim in these challenging times, and the reasons for that are clear. As the world continues to become more volatile, people in affected communities will need a lot of financial help to get through some of the most challenging times in their lives.

While mainstream financial institutions might refuse to serve them, the title loan industry will have plenty of opportunities to offer financial help to people who need it, and right when they need it the most.

Disclaimer: The content on this page is for informational purposes only, and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.

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