Rarely Do People Default on Title Pawns. Here’s Why!

Most people are aware that taking out a Pawn of any value is a risky move. When it comes to financial matters human nature is more inclined towards the path that offers the lowest risk.  Although they have higher interest rates than traditional bank loans, title pawns can be one of the safest ways to borrow money. Why? Because people seldom default on a title loan!  Default percentages for 2021 were 4.64%.


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Are you curious about why it is unlikely that you default on a title pawn? What makes them unique? Continue reading to find out the answers.

What is a Title Pawn?

This comprehensive guide will explain why defaults of title pawns are so rare. Before we get any further, let’s define what a title pawn is.

A title pawn is where you pledge your vehicle’s title to secure temporary funds. The lender is granted temporary access to the vehicle title in exchange for the borrowed money. If the borrower defaults on the pawn, the lender can take the car back as its rightful owner.

Although it may sound frightening, defaults and repossessions can be very rare. These are just a few reasons why this is true.


It’s very rare for a title pawn borrower to default. This is because the borrower has a powerful motivation to “drive” them! They want to continue to have easy access to future money and are willing to work with the lender.

Some lenders are less likely than you might think to repossess your car. This is because both the borrower as well as the lender have many other options.  If the borrower can make a minimum payment, then the lender will continue to work with them to extend their title pawn for another 30 days to give them more time to repay the title pawn.

Default Terms

As we said, the idea of defaulting on a pawn and losing your car is very scary. And many people imagine this is something that will happen as soon as they miss a single payment.  As stated above the lender only needs you to make the minimum payment to keep from defaulting.  If this can be done, then you will not lose your vehicle.

And on top of that, there are often options to roll over your pawn for an additional length of time. In that case, someone in danger of default could fix things with a single phone call!  If you determine you cannot make a full payment, contact us in advance to notify us and we will allow you to make the minimum payment to extend the title pawn.

Rollover Options

Title pawns are often confused with payday advances, but they are not the same. One of the reasons for this is that they each typically last for a month.

Both types of financing are intended for quick money. This allows a borrower to effectively pay back what they owe once they get paid.

Most title pawns and payday advances give borrowers the option to roll over the financing for another month (or longer) as needed. While this compounds the amount of interest that you owe because your vehicle is at risk of being repossessed it is one more reason that you are unlikely to default on a title pawn so long as you communicate your situation to the lender.

Borrowing the Right Sum

Which do you believe is the main reason for defaulting on a pawn? Many people borrow more than they can afford to repay. If your financial situation changes suddenly, you might not be able to make the payments.

Two main advantages title pawns offer over traditional financing options are: The first is that you don’t have to think about the future for 30 years. Instead, you can focus on the next 30 days. You cannot borrow more than your collateral is worth.

This means that you shouldn’t borrow too much. You are less likely to default if you borrow the right amount.

Title Pawns are not subject to default if you work with the Lender

This has been said before, but it is worth repeating as long as your lender works with you, and you communicate with them regularly and make the minimum payment you will not default. The lender won’t want to repossess your car at all.

It’s easier for them to help you extend an existing pawn. You get more time to repay the pawn, and they get more interest. Everyone wins in this way.

Your Chances of Success

Are you still worried about your title pawn defaulting? The odds of you defaulting on a title pawn are in your favor, believe it or not!

In 2012, the University of Houston Law Center surveyed 400 people with title pawns. They were shocked at what they found.

The research found that less than 10% of vehicles involved with title pawns were repossessed. Their research was limited to three states, and it seems that this shows the fact that title lenders are unlikely to repossess vehicles.

Why? It’s easy to work with borrowers, let them extend their pawns, and collect the original pawn interest fees.

This is one more reason to “breathe easy,” when you get a title pawn.

What’s Next?

You now know why it is unlikely that you will default on the title pawn. Do you know where to get a title pawn?

Florida Title offers all the above and specializes in getting you the money that you need when you need it. Contact us today to learn more about what we can do. Online applications are accepted, but if you are located near the area of Pensacola, FL you will need to bring the vehicle along with a few documents to determine if you will be approved.  If outside the service area, you can complete the process online.

Both of our locations are near Pensacola (one in Lillian AL and one in Seminole AL). For any questions, please call the South Office at (850) 458-2274 and the North Office at (850) 456-2274.