When your car is a ticket to short-term cash and long-term financial hardship

For an estimated 2 million people every year, the title to their car becomes a pawn in their bid to stay financially afloat — a move that doesn't always work out.

While a small piece of the overall lending market, auto-title loans fall into a category of consumer borrowing outside the regular banking world. They work how you'd expect: You hand over the title to your car for a set amount — the average is $1,000 — and you get to keep driving your car. You get the title back when and if you pay off the loan.

A small share — in the neighborhood of 10 percent to 20 percent — ends up having to turn over their car because they can't pay what's owed.

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Source: WSJ - 🏆 98. / 63 Read more »