Title loans are becoming quite popular.
Many people know what exactly they are, while others are unable to enjoy this facility as they have some misconceptions. It’s time to here to find out more about title loans and also clear some common misconceptions about this loan facility.
Title Loans are Expensive
Whenever a person engages in an emergency cash requirement, one friend suggests that he go with a title loan while another one will say don’t go for this option because it is super expensive. Well, it’s nothing but a misconception that you need to clarify. A title loan works exactly like any other auto loan. It’s a short term loan facility which only becomes expensive when you drag it for the long term.
In other words, you are supposed to repay your loan within 30 days. But when you fail to pay it back within the given period. It’s when a dangerous debt cycle begins as you own a risky debt without knowing anything. As you are not paying back a loan, then nonpayment brings charges, and it does not happen only with a title loan. Any other loan you get either secured or unsecured, it will bring some penalties for nonpayment.
So, if you think that you won’t be able to pay off your loan within a set term like 30 days for an auto title loan, then you shouldn’t opt for this deal at the first step. Click here to find out more about title loans.
Title Loans come with High-Interest Rate
A title loan is a short term loan where a lender has to cover up his expenses and allow you loan facilities at the same time. Yes, it comes with a low-interest rate and a high loan amount compared to payday loans or credit card advances. So, you need to first look into the market to get an idea about your available options. The very first choice you have is to go to a pawn shop and ask a pawnbroker to keep your expensive items for quite some time and lend you money; in this case, you can’t borrow too much.
A payday loan also comes with a limit, and many experts advise you to avoid credit card cash advances and payday loans as they are super expensive and hard to manage in the long term.
Title Loan will make You Lose Your Car
Well, it’s not the case always. If you think that you will pay back your loan on time, then there is no such risk of car repossession. An advantage of going with this secured auto loan facility is that you can borrow the right amount of money based on your car’s market value. When you have a new car, then the chances are that you can borrow up to $1000 or more with it.
That means you can meet up your emergency cash requirements quickly through this loan facility. And pay off the loan after 30 days when you arrange cash. There is a risk of repossession, indeed, but when you fail to repay a loan, the lender gives you a chance to roll-over and set new terms. Going with repossession is the last resort of a lender; if you play smart, you don’t have to face this problem.
Title loans are Scam
When borrowers come to know about title loans’ advantages like same-day loans and quick approval, they think it’s a scam. You should know that consumer protection laws handle this kind of loan, and it’s not a scam as tons of lenders are offering such facilities all over the USA.