Title Loan Calculator

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Reviewed by: David Chen, CFA
David is a Chartered Financial Analyst with 15 years of experience in consumer lending and specialty auto finance.

This 4-in-1 Title Loan calculator helps you understand the high costs of this loan type. Enter any three variables—Loan Amount, Annual Rate (APR), Term, or Monthly Payment—to solve for the fourth.

Loan Amount ($) (P)

Annual Rate (%) (R)

Loan Term (Years) (T)

Monthly Payment ($) (M)

Title Loan Formulas (Amortization)

Solve for Monthly Payment (M):
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]

Solve for Loan Amount (P):
P = M [ (1 + i)^n – 1 ] / [ i(1 + i)^n ]

Solve for Loan Term (T):
T = ln(M / (M – Pi)) / (n * ln(1 + i))

Solve for Rate (R):
Solved iteratively (no direct formula)

Formula Source: ConsumerFinance.gov

Formula Variables

(P) Loan Amount: The cash you receive, typically 25% to 50% of your car’s value.
(R) Annual Rate: The Annual Percentage Rate (APR). Title loans have extremely high APRs, often 300% or more (e.g., 25% *monthly* interest).
(T) Loan Term: The loan duration in years. Title loans are very short-term, often 0.25 years (3 months) or 0.5 years (6 months).
(M) Monthly Payment: The fixed monthly payment to pay off the loan and interest.
(i) Monthly Rate: The annual rate divided by 12.
(n) Total Payments: The total number of payments (Term in years * 12).

Related Calculators

What is a Title Loan?

A car title loan is a short-term, high-cost loan where you use your vehicle’s title as collateral. You give the lender your car’s title in exchange for a small loan amount. You can continue to drive the car, but if you fail to repay the loan, the lender can repossess your vehicle.

Title loans are considered a very expensive and risky form of credit. The interest rates are exceptionally high, often expressed as a monthly fee. For example, a 25% monthly fee is equivalent to an Annual Percentage Rate (APR) of 300%. Because of this, the total cost to borrow can be staggering.

This calculator helps you understand the true cost. By entering the loan amount, the high APR, and the short term, you can see the monthly payment required. You can also work backward: if a lender offers you a $1,000 loan with a $300 monthly payment for 6 months, you can use this tool to solve for the Annual Rate (R) to see the true (and likely triple-digit) APR.

How to Calculate a Title Loan Payment (Example)

Identify Your Loan Details
You need $1,500 (P) for an emergency. A title lender offers you a 1-year (T) loan at a 300% (R) annual rate. You want to find your Monthly Payment (M).
Convert Annual Rate to Monthly (i)
First, convert the staggering annual rate to a monthly decimal: i = (300% / 100) / 12 = 3.00 / 12 = 0.25 (This is 25% *per month*)
Calculate Total Number of Payments (n)
Next, find the total number of monthly payments: n = 1 Year * 12 Months/Year = 12 payments
Apply the Amortization Formula
Use the standard loan payment formula: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
M = 1,500 [ 0.25 * (1 + 0.25)^12 ] / [ (1 + 0.25)^12 – 1 ]
M = 1,500 [ 0.25 * 14.5519 ] / [ 14.5519 – 1 ]
M = 1,500 [ 3.6380 ] / [ 13.5519 ]
M = 1,500 * 0.26845
M = $402.68
Final Result
Your monthly payment would be $402.68. You would pay a total of $4,832.16 ($402.68 * 12) for a $1,500 loan.

Frequently Asked Questions (FAQ)

Why are title loan interest rates so high?

Rates are high because these are short-term, high-risk loans often given to borrowers with poor credit. Lenders justify the high rates (often 300% APR or more) by the risk of default and the cost of acquiring and repossessing the vehicle.

Can I lose my car if I get a title loan?

Yes. This is the primary risk. The loan is secured by your car’s title, and if you fail to make payments as agreed, the lender has the legal right to repossess and sell your vehicle to recover their money.

Is a title loan the same as a payday loan?

They are similar in that both are high-cost, short-term loans, but they are structured differently. A payday loan is secured by your next paycheck. A title loan is secured by your car’s physical title, which is generally riskier for the borrower because you can lose your vehicle.

How much can I borrow with a title loan?

Lenders typically offer 25% to 50% of the car’s current resale value. The loan amounts are usually small, ranging from $100 to a few thousand dollars, even if your car is worth much more.

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