Desperate for Money in Oakland

While checking my email and enjoying a Venti-sized Pike Place Roast at a Starbucks near the Oakland International Airport, I spied the sign above on a building across the street. Title loans are typically short-term loans at very high interest rates. For example, a 30-day loan at 25% interest is the equivalent of 300% APR. Some title loans have APRs of over 600%.

In return for fast cash with few questions asked, the borrower must have a car that is owned outright and must sign over the title of the car as security on the loan. If the principle and interest are not paid off on time, the borrower can usually roll over the loan to a new due date, but if he or she is delinquent on the loan, the borrower can lose the car.

Seeing a sign like this one led me to ask, “What kind of trouble must you be in to borrow against your car for cash in 15 minutes?” The patrons of this institution inhabit the dark corners of our economy, and lenders like this one are happy to take advantage of their desperation. Right across from Starbucks.