For those of us in the personal finance realm, the answer to that question is pretty simple. Just say no to the title loan. Several times a week I hear this commercial on the radio and it goes something like this:

“Helpful” Friend: “Hey Mike, what’s up?”

Entrepreneur Guy: “I’m short on cash so I’m working today. I have a side gig, I’m a clown for kid parties.”

“Helpful” Friend: “Oh man! Why are you working on the weekend, you have a car, don’t you?”

Entrepreneur Guy: “Sure I have a car, what’s that got to do with anything?”

“Helpful” Friend: “There’s no need to have a side gig, just get a title loan. Go down to XYZ Title Loan Shop and walk out with money! Easy!”

Entrepreneur Guy decides to go work as a clown that day anyway, and we hear him knock at the door.

Entrepreneur Guy: “Hey kids!”

Kids, sounding like demons: “It’s a clown, GET HIM!”

Entrepreneur Guy, whining: “Ohhhhhhh!”

Another Mom: “Oh, Mr. Clown… will you be a clown for my son’s party next week?”

“Helpful” Friend: “Mike, there’s no need to go through all that agony, just get a title loan, man!”

Then the announcer comes on and explains how easy it is to get a title loan on your car, that they don’t care how old your car is, or how many miles it has on it. As long as you own it, you can get money for it!

It all sounds very innocent.

This is so wrong in so many ways, let me see if I can lay them out:

• The title loan may look on the surface like extra money, but Mike has to pay it back, with hefty interest charges.
• If Mike is short on cash, he is doing exactly the right thing by working a side gig to earn additional money that he can keep free and clear, not a loan which he has to pay back.
• Mike is going to have to work that clown job even more in order to pay off the interest charges after taking out a title loan.
• What is up with the helpful friend dissuading Mike for being entrepreneurial?
• If you take out a title loan on your car, then you essentially no longer own your car. If you are late on a payment, the loan holder can take your car away from you.

Mike should be applauded for putting on the clown suit and trying to make the extra money he needs. It’s sheer stupidity to take out a title loan on your car, and risk losing your vehicle if you have a legitimate way to make extra money. In fact, even if you don’t have a legitimate way to earn money, it is still foolish to take out a title loan, or any type of payday loan for that matter. It’s the same foolishness as using a credit card and not paying what you’ve charged in full each month, and ending up paying interest.

Be like Mike… don’t go the stupid route and borrow money that you have to pay back with interest. Find yourself a side gig to earn extra money when you need it. Here are some sites that will help you with some ideas on how to earn extra cash:

• PT Money: 52 Ways to Earn Extra Money
• Delivery Away Debt: Pizza Delivery The Dave Ramsey Way
• Faith and Finance: 33 Ways to Make Money
• The Simple Dollar: 50 Side Businesses You Can Start On Your Own