Glossary · Loan products & lenders

Title pledge / title pawn

The legal wrapper that lets a car-title loan run at ~300% APR in states like Georgia and Alabama.

What "title pledge / title pawn" means

In several states a car-title loan is written as a "title pledge" or "title pawn" under a pawnbroker statute rather than a lending law. That framing lets the lender charge a monthly pawnshop fee — commonly 25% a month, roughly 300% APR — that a normal loan cap would forbid. Georgia, Alabama, Mississippi and Tennessee are the classic examples.

The wrapper matters because it changes your rights: pawn rules govern redemption deadlines and whether the lender can keep any surplus after selling your car. Know which statute your loan falls under before you sign.