Are Car Title Loans Too Expensive?
June 13, 2012
A commonly cited problem with car title loans (or auto title loans) are that they’re too expensive. Critics often cite that car title loan interest rates and payments can become high if such loans are continuously rolled over. However, this leaves out one key factor – it is up to the consumer how much he or she borrows.
As with any loan, you could take on more debt that you can handle with an auto title loan if you don’t monitor it. If you just sign the dotted line without reading your title loan agreement and borrow the maximum amount while ignoring your monthly payments, you’ll end up paying more interest than you should. But if you borrow only what you need, and nothing more, a car title loan can be a greart liquid resource, and help you get that personal loan, and at the right time.
So, to answer the question – no, car title loans are not too expensive. It is up to you, the borrower, to borrow just enough money and pay it back properly. The worst that could happen is a repossession of your vehicle, which wouldn’t be fun. However, if you went with, say, a home equity loan, you’d end up losing your home if you default. So much for the lower risks of traditional lenders.
How Can I Keep My Car Title Loan Under Control?
Do the Math
Be sure that you understand the total amount that you’ll be expected to pay each month. Then, be sure that you’ll have enough money to meet your car title loan rates and payment obligations.
To keep your interest payments down, only borrow what you need. For example, if you have a $3,000 medical bill to pay off, borrow $3,000 and pay it back on time.
Look For a Below-Average Interest Rate
The average interest rate on a car title loan is 25 percent per month. As the savvy consumer you are, look for something a bit lower than that. Car Cash Loans offers low interest car title loans, about half that amount, which would significantly lower your interest payments when compared to average lenders.
While repaying your auto title loan, resist temptations to splurge on unnecessary items. While it is a good idea to keep up with paying for utilities, housing, transportation and groceries, avoid purchasing luxury items such as jewelry, video games and so on. By doing so, you can use as much money as possible to pay for your loan.
Avoid Using Other Debt
Unless it is absolutely necessary, avoid taking out additional loans until your current loan is paid off. This will help you avoid taking on too much debt.
Will I Lose My Vehicle?
Only 4 to 8 percent of car title loans result in repossessions. This means that you have a greater than 90 percent chance of keeping your vehicle while getting the money you need.
Also, note that you will hold on to your vehicle for the duration of the loan. You don’t have to give it to the lender. Instead, the lender will just require you to temporarily hand over your vehicle’s title. So, you can get some quick cash and keep driving your vehicle.
Should I Obtain a Car Title Loan?
This is a personal financial decision that should involve careful consideration. Banks have stringent loan requirements and or high personal loan rates that may discourage, or disqualify you from getting a loan. This is especially true if you have a low income or credit problems.
The requirements for getting cash with a car title loan are not as tight. You’ll only have to provide minimal proof of income at Car Cash Loans. Also, there will never be a credit check.
So if you could use some quick cash, and you’re responsible, consider a car title loan and get a cash loan ASAP and the money you need. Remember, you can limit your own payments by getting the money you need.