There are a ton of ways to get fast cash, and most of them aren’t a good idea to use! This includes the use of title loans. As far as loans go, these are the ones that cause people the most problems. Fortunately, they are becoming less common, but are still a choice that many people make. In this post I want to share with you why so many people get themselves into trouble with car title loans, and the consequences that you face when you make this mistake!
Since a title loan will allow you to borrow money based on the value of your car, you can potentially borrow a lot of cash. Most lenders will go as high as 50% of the car’s total value, so a car that’s valued at $10,000 can net you a loan of $5000! That is a ton of money to pay back in just thirty days. You have no obligation to borrow the maximum that they offer you, but most people will have a hard time not taking five grand if it’s offered to them. This is why so many people get screwed with this type of loan!
Title lenders are renowned for their ability to put judgment aside and allow borrowers to take more money than they have a fair shot at paying back. This is a part of their business, and they know that you are either going to default or request an extension. Either of those options make the lender more money than if you would have paid it back normally.
What happens when you don’t pay the loan back? You lose your car! Title loan lenders are very serious about repossessing cars, and will not cut you any slack. Some will even go as far as to require you to install a GPS tracker in your car so they can find it easily. Once they’ve taken it, it will be sold, and in some states they don’t have to pay you the difference between your loan and what your car sold for!
Title loans are risky business, and should only be used as a last resort. Even if you do apply for one, don’t borrow a penny more than you need to so that you won’t fall into their trap!
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