Interest rates on vehicle loans can be as high as 300% APR, making them an expensive loan option with significant financial risks.

Vehicle collateral loans, also known as auto equity loans or auto title loans, allow you to borrow money using your car as security. This type of loan provides a way to access funds without selling your assets. The lender places a legal claim (commonly referred to as a lien) on your vehicle's title until the loan is repaid.

It's important to note that using a car as collateral should really only be used as a last resort. These types of loans are very expensive, with companies often charging up to 25% monthly interest rates, which equates to a staggering 300% annual interest rate (APR). In other words, you can expect to pay up to $250 on a $1,000 loan per month.

While it offers benefits such as fast approval and no credit check, it is essential to be aware of the risks, including the possible loss of your vehicle and very high interest rates. If handled responsibly, auto equity loans can provide the funds you need without sacrificing your mobility, but remember that they really shouldn't be used for long-term loan needs.

If you need a loan, especially for larger amounts, we highly recommend that you stay away from auto title loans and instead approach one of the best regional banks to inquire about their loan offers.