Car title loans have become quite popular in the recent times. Not many people know what it really is but think about it in the positive sense. Most folks do face times where they are short of money. Loaning money is hard to do these days. A car title loan is a neat idea but it comes with its own repercussions. If you are wondering what a car title is and why you shouldn’t get one, you should read this article for more insight.
A car title loan helps you to get money. There is one big thing it asks in return that you sign you’re already paid for vehicle’s title instead. There are so many repercussions to it. Here are some reasons why you shouldn’t opt for a car title loan and why they are bad news.
Interest Rates of an Attractive Car Title Loan
An attractive car title loan will easily get the better of its prey. The lender shall easily be able to capitalize on the situation given how helpless the borrower is. A good car title loan doesn’t really exist. Many organizations are spending hours in highlighting and reporting how these lenders prey on innocent people who have no hope and turn to these folks. A car title loan can give you nightmares for nights to come. People nowadays hate to use credit cards given the interest rates. But the car title loan interest rates will make any credit union blush with glowing red cheeks.
Fees that can be a Pain
When it comes to a car title loan on will have to deal with some interest rates and some fees too. There are so many fees when you sit down to do the math. There are fees charged for documentation, fees for late submission and fees for processing and many other small jobs. All these fees are being charged legally. One can be asked to pay a couple of hundred dollars for this kind of work. Just make sure that nobody is taking advantage of your situation. The fact of the matter is that lenders accept other payments too. They say use balloon payments. Balloon payments look attractive but can certainly be a pain. These payments ask the borrower to pay the interest on a monthly basis and pay the huge lump sum amount of the loan at the very end of the term of payment. This can be a very taxing way to go and can leave you bankrupt and pained for many years to come. Such financial decisions require a good sit down and must not be taken in haste.
It is a fact that if the lender payments aren’t killing you then the balloon payments might do you in. Balloon payments are payments of interest for a term. When the term comes to an end one can pay the entire loan. This is taxing and can leave someone broke if you don’t have the financial backing. Be sure about the situation you are in. Fees are necessary but make sure nobody exploits you and cheats you because you are the one who will have to pay if you fail to take notice of what is wrong with all those payments.
Other Alternatives to it
A good car title loan will still have lenders put up the excuse that what they do it for the best of those who aren’t fortunate enough to finance their own jobs. They feel that the service with which they are providing is doing good. This is partially true but isn’t the whole picture. Most credit unions have started looking for alternates. Like in the state of North Carolina, lenders are offering loans at some attractive interest rates.
Another eye catching option is that you can take checks in advance from your employer. This is one way of getting money in case you or a family member is stuck in an emergency situation. It is really important for one to understand that a car title loan is a difficult route if taken. There are many pitfalls if you are aware of the problems you might face. Make use of the Internet to find out more information. Read articles and brush up on your knowledge about such loans. If you do want to take up such a loan then it is advised that you make an effort to understand what it is you are getting into and that you get what repercussions you might face.