Getting a car title loan can be bad news!
CNN once wrote an article in reference to why car title loans are a bad idea. Even though car title loans can give you the cash that you need on a short notice, you are risking something much more important. You are putting your car which if you default enough times, the loan company can seize your car and it’s gone. Not only is it bad for you to have a car title loan but the interest rates are something that would give my grandmother a heart attack if she was still around. You are forking over interest that is even higher than what even a shady credit card company may impose on you.
Even though they may repossess your vehicle you can still be faced with even more financial problems because they more than likely will not regain all the money they lost on you. The reason why car title loans are bad news is because they make credit card interest look like a walk in the park. Car title lenders are in a different category than those who issue out credit cards. They can charge exorbitant amounts of interest that to a person who isn’t in a financial crisis can see. Why is it that they can charge this type of interest? They are not protected by what is called usury laws There are only a handful of states that protect consumers from these outlandish interest rates.
It is stated within the federal laws that a company HAS to disclose what their interest rates are before you are obligated to make any decisions. So you may want to reconsider if the loan percentage is too high. You don’t want to be in any more financial despair than you are already in.
Why car title loans are bad because they tend to prey on people who have little to no credit to even bad credit. Especially with the times as they are right now, there are going to be lenders out there that will prey on you especially when you have some sort of collateral to back the potential loan that you are requesting.
Times are especially hard for creditors, bankers and people just like you so please think and weigh all your options before considering a car title loan. If you do end up taking out a loan, please refer to our borrowing responsibly section as there is some basic information that can entail you to have a successful borrowing experience.
