Why Title Loan Interest Rates Are High

At Utah Money Center, we’re happy to offer title loans as a perfect alternative if you’re in need of some quick cash. Our programs can get you in and out with a little more flexibility than you had before.

One of the most common questions we hear from our customers who come for a car title loan is this: Why is my interest rate so high? Well, there are a few general reasons why. Let’s look at these basic explanations.


A title loan can be very helpful to many people, but it’s considered a high-risk loan for a lender to take. This is due to several factors, including the checks that are required – or not required – on potential borrowers before a loan can be given. The higher the risk in any loan situation, the higher the interest rate has to be so the lender can be adequately compensated.


There is virtually no documentation required for title loans, which is part of what makes them so convenient – but there’s a trade-off here. Once again, little documentation means that the loan company in question is taking a high amount of risk in giving you a loan, and they have to ensure they’re covered.

Credit Check

The biggest documentation area that differs from most other loans is the credit check, which isn’t generally required for a title loan. Without the ability to see your credit, a lender can’t be as certain of your ability to repay the loan, and must charge higher interest.

There is a high rate of default in the title loan industry, and this is just another risk for a lender. Therefore, it’s another reason why interest might go up.

How to Get Better Rates?

In some cases, title loan lenders are able to give lower rates to clients that come back for additional loans. There can also be interest-free loans for clients in good standing with a given lender.

To find out more about a title loan, speak to the experts at Utah Money Center today.