Thinking of getting a Car Title Loan? Read this!
Payday is another week away and you’re short on cash and have little to work with in savings. You see an ad mentioning how using your vehicles title will help you get the money you need to make it through to next payday. All you need is the title to your car and your signature and you will be out the door, no credit check or postdated checks required.
Sounds easy right?
Actually, the loan is far from easy for many people to repay. You’ll turn your title over along with keys to your car and only receive a small fraction of the cars actual worth. What makes it worse is not only are you getting a small amount back you are getting charged extremely high interest rates that are upwards of 300% APR (Annual Percentage Rate) and usually given about a month to repay the loan.
Here is where it can get messy. If you can’t repay your loan one of two things can happen. You can typically roll the loan into another month and receive increased fees although if you had trouble repaying the debt before, you might find it impossible to repay it with even more penalties and fees attached therefore leaving you with one option, relinquish your vehicle.
So at the end of the day you can find yourself in a worse position money wise due to trying to repay the original loan and still be out of a vehicle.
If you can, start saving a few dollars from each paycheck now so that should you need to borrow short term money you are borrowing from yourself.
As always, if you have any questions, would like to discuss your financial challenges, or are just looking for advice, please call us at your convenience. As always, we are here to help and look forward to hearing from you.