Car title loans offer people another way to get a short-term loan. They are generally very costly and to get one you will need to pledge your vehicle as collateral, and you will need to hand over the title to the lender until you repay your loan completely.
Car title loans are generally very costly, and you’re putting yourself in risk of being unable to pay your load, subsequently losing your four-wheeler.
If you have no other options left, for example, you need funds for medical treatment, then title loans do make sense. Other than that, getting a car title loan is a direct risk for you.
How does it work
In order to borrow against your vehicle, your car needs to have some decent equity. In most cases, you will need to show proof that you have paid every loan used to purchase the vehicle, but some lenders do have a soft spot and allow you to borrow while still paying off your car. These loans can range from about $100 to $5.500 on average and can be used for various things and one of those certainly is for your vehicle repairs. If that is the case, be sure to get the best auto repair financing deal that will benefit you in the right way.
Lenders, like title loans Orlando, will offer you only 25% to 50% of the value of the vehicle. The amount of money you can borrow is based on its value. The greater the value of your car, the more money you can borrow. Lenders will not take risks and will often make it easy on themselves to get their money back. In the case of you being unable to pay out your loan, lenders will have to repossess and sell your vehicle. Another trick the lenders use is a GPS tracking device on your car, just in case you’re thinking about hiding your four-wheeler.
Losing your car – what do you do?
The thought of losing your car should be the sole motivator of paying off your title loans. In case you don’t pay lenders can solve this problem by repossessing your vehicle, sell it, and keep for themselves the share of the money. Keeping up with your payments means you will not lose your favorite four-wheeler, and you get to continue with your everyday life. Imagine going to work if you lose your car, and imagine not being able to work to continue earning. This could be a major problem for you and your family. So if you don’t have to do it, don’t do it.
What are the alternatives?
Before taking money this way, make sure you have gone through all the alternatives. You might not like some of these options, but they are better than what might happen if you can’t pay your loan.
Personal Loan
It’s no secret that a personal loan is your best option if you’re considering borrowing money. Head to your bank or credit card union and ask for borrowing with a longer-term loan rate.
Credit Cards
Credit cards can sometimes be a smart way to borrow money. Keep in mind that they are unsecured loans, but they don’t carry the risk of repossession.
Cutting Cost
Cutting your costs will be a temporary sacrifice that will get you over the rough patch unscathed. That being said, it’s easier said than done.
Extra Income
Consider taking on another job. You might not like the extra hours or so, but hard work always pays out. Especially if competing against a car title loan.
