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Bang!

Car title loans can lead to a crash.

Car title loans are very similar to payday loans. They’re advertised as modest short-term loans, where the lender uses the borrower's car as collateral. Unlike the average payday loan, car title loans can be as high as several thousand dollars and are often based on what your car is worth. Car title loans typically have to be paid back after one month, although the specific terms can vary. Some lenders structure the loans to be repaid in several installments, over a longer period of time.

Most borrowers end up renewing these loans. Renewal works the same way as with payday loans. You pay the fees again and continue to owe the original amount. The problem is, you risk losing your car if you don't pay back the loan or renew it.