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IHR Archive Business What You Should Know About Title Loans

What You Should Know About Title Loans

title loans

A title loan is a type of personal loan that requires you to use your vehicle as collateral. It’s typically a short-term loan with high interest rates, and many lenders charge fees on top of the interest rate.

Title loans are usually processed quickly and they don’t require a credit check, which can be helpful if you need cash fast or don’t have good enough credit to qualify for a traditional loan. However, there are several other ways to get cash quickly without putting your vehicle at risk. Consider alternative payday loans from credit unions, personal loans from online lenders or even a cash advance on your credit card instead of pledging your vehicle’s title.

Tips for Finding Reputable Title Loan Companies in Chandler

A major concern with a title loan is that if you’re not able to pay the loan back within 30 days, your lender can repossess your vehicle and sell it. They also typically place a GPS tracker in your vehicle to make it easier for them to retrieve it. Those are serious risks, and they can be costly.

Some consumers pledge their vehicles as collateral for title loans to meet urgent financial needs, but critics say the industry is predatory and exploits vulnerable people. Bankruptcy lawyer Lorena Saedi estimates that title lenders are involved in a third of her cases, and she recommends consumers look into alternatives before resorting to a car-title loan. She suggests calling local food banks to ask about emergency assistance programs or seeking help from a consumer debt specialist before turning to a title lender or pawn shop.

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