Report: 1 in 5 Auto Title Loan Borrowers Lose Their Car

FRESNO, Calif. (KMJ) — People who use their car as collateral for an emergency loan are being slapped with massive interest rates, long repayment periods, and many end up having their vehicle repossessed.

In the first report by federal regulators looking at the auto title lenders, the Consumer Financial Protection Bureau says the typical loan is about $700, with an annual percentage rate of 300 percent.

Additionally, 20 percent of borrowers end up losing their car.

The bureau says with these conditions, most consumers are left with a pile of debt.

Auto title loans have grown substantially since the recession, even though they’re illegal in half of the country.

However, this report could lead to new regulations on the industry, similar to payday loans.