Pink Slip Loans are loans where you put your vehicle up for collateral in order to obtain the loan. The borrower will give you a loan based on half of the appraised value of your vehicle. The lender then puts themselves as the lien holder on the title making them the legal owner of the vehicle while the borrower remains the registered owner. It’s the same thing when you are financing a car.
After the loan amount has been satisfied the lender releases interest in the vehicle and the lien is satisfied. One of the benefits to pink slip loans is that you can continue to use the vehicle while you are paying off the loan. This should add some extra confidence to the borrower because they will still be able to use their vehicle to get to work.
These types of loans are not like pawns where you have to leave the collateral there.
Pink Slip Loans are emergency loans. They are short term high interest loans. Borrowers are encouraged to pay the loans off as soon as possible. If you don’t interest can continue to accrue and you may end up getting your vehicle repossessed.