Smart Money

How do title loans work in Pennsylvania?


May 3, 2024



min read

How do title loans work in Pennsylvania?

Are title loans legal in PA?

Title loans are effectively not legal in Pennsylvania. 

The state has strict usury laws that prevent lenders from charging excessively high interest rates, which are typical of title loans. Title loans are a type of secured loan where borrowers use their vehicle title as collateral to secure the loan. These loans are often short-term and can carry high interest rates, which can lead to a cycle of debt if not managed properly. [1]

What are the alternatives to title loans for Pennsylvania residents?

Pennsylvania residents have other options to consider if they are looking for financial assistance. These include, but are not limited to other types of loans such as:

  • Banks: Usually offer competitive rates particularly for customers with strong banking relationships. Rates may vary depending on the customer’s credit profile.
  • Credit Unions: Sometimes provide lower rates for personal loans because they are nonprofit entities. Rates might be slightly lower than those of banks, but membership is generally required to obtain a loan. 
  • Online Lenders: These can be more convenient and often capable of processing loans faster than traditional banks. They might also offer loans to people with lower credit scores, although at higher interest rates at times.

To find the best loan rates, it’s a good idea to shop around and compare offers from multiple lenders. Keep in mind that advertised rates may only be available to borrowers with excellent credit ratings. Additionally, it's important to consider any potential fees associated with the loan, such as origination fees, which can affect the overall cost of the loan and might impact your decision.

It's generally recommended to use rate comparison tools and pre-qualification features offered by many lenders online, which can give you a better idea of the rate you might qualify for without affecting your credit score.

Lastly, it's important for residents of Pennsylvania to be cautious of services offered by online lenders or those from neighboring states where title loans might be legal. These may still be subject to the terms set by Pennsylvania law if the borrower is a resident of Pennsylvania.

Yendo - the title loan alternative

Yendo is the first credit card that's backed by your car. So, if you own your car outright, or are making payments on it, you can use it to apply for a credit line of up to $10k. No more sky high title loan rates, no more re-applying if you need access to ongoing funds and a lot more money saved in your pocket. Apply today!


Disclaimer: Yendo is not a provider of financial advice. The material presented on this page constitutes general consumer information and should not be regarded as legal, financial, or regulatory guidance. While this content may contain references to third-party resources or materials, Yendo does not guarantee the accuracy or endorse these external sources.