Most of us have heard of the payday cash advance, especially if we have ever had a stage in our lives when we have had money troubles which meant that our pay check didn’t stretch to the end of the moth like it should. In the same vein as the payday loan is another product known as the car title loan which does a similar job and satisfies similar needs but have a few obvious differences.
As the name suggests a car title loan has something to do with your car and in fact is a secured loan in which you use your vehicle as collateral to secure the cash you need. You might think that the fact that you are using you property as security would put people off but with loans for car titles you can get much more cash compared to a cash advance due to the fact that the lender can use your vehicle to recoup your debt if you fail to make the agreed repayments.
There are many problems associated with the car title loan which causes it to get treated in much the same way as the payday advance from many consumer advice centers. There’s no doubt that using loans on car titles can give you problems if you are not careful. In fact I would go as far as to say that if want to stay in financial health you should do your utmost to avoid their use entirely but many people are still going to use them either due to lack of financial education or through necessity. Sometimes there just isn’t any other choice for someone in need than to use this type of secured fast cash loan.
The reason loans on car titles attract so much negative publicity is down to a couple of vital facts that you must be aware of is you are going to make use of them.
1. Any car title loan company you find will charge you insanely high interest rates, usually over 400%, which means that if you were to borrow $1500 over an 18 month period your total repayment amount would be over $4000. These types of interest rates lead to even bigger money worries as the repayments drain your already struggling reserves.
2. A car title loan is secured against your car so if you happen to fall behind in your repayment the title loans lender is within their rights to repossess your vehicle and sell it to make up for the money you still owe.
As you can see these are a couple of very good reasons to give car title loans a miss so why do people still use them?
1. Many consumers see the commercials for these lenders and fail to look into the reality of the credit product before handing over the title deed for their car. Sometimes when you are desperate for quick cash it is easy to get caught up in the promises which sound too good to be true.
2. If we have an emergency on our hands sometimes its better to get the money from whoever will provide it than to go without.
3. An online car title loan can provide cash in a matter of hours – If you are in desperate need for money then its easy to feel that using fast cash to put an end to your worries regardless of the future consequences.
4. Large sums of cash are available – Although these companies will only give you a loan up to about 50% the value of your car it could be much more than a payday advance lender is willing ot hand over.
In conclusion, you want to be doing all in your power to avoid getting into a situation where you have on option but to use an auto car title loan. Making use of these is only going to compound your misery over the long run so its much better to get control over you finances, even if this means you have to seek independent financial advice.
