People today are looking for ways to escape their mountains of debts. Some are capitalizing by streamlining their spending or getting debt counseling, while others in a rush to quickly resolve their problems have filed bankruptcy or taken out high interest rates or collateral-based financing, such as auto title loans.
Most people who are drawn to these loans are those who are struggling to make ends meet. They are in desperate need of monies and it is with these types of loans that the consumer is enticed. The application is made with a promise of an advancement of cash to tie them over until they get their next check.
These loans are specifically set up to rob the consumer in more than one way. They are labeled "title loans" for a reason. You have to submit your title to your car once the loan is approved and there are some lenders who request a copy of the car owners keys. Other conditions include that the car has to be paid off, that you are the sole owner, and the loans are basically for no more than 30 days. Your credit standing is not questioned and income verification is nominal.
Another backlash of these types of loans is the interest rates. They are extremely high and many borrowers do not realize just how much they are being taken for, because sadly enough they are only looking at the cash amount that they are receiving, rather than the interest that is being added. Not only do the interest rates increase the loan, but you have to watch out for the other fees that are normally affixed to the note. In addition, if you fall short of repaying these loans, you can fall into jeopardy of losing your vehicle. You are then left with no car, a loan note, and possibly a bad smear on your credit report.
This cash advancement practice is nothing new when it comes to borrowing money; it is in line with the old saying "highway robbery." The difference that is being observed today is that the problem keeps escalating.
Some lenders claim to lend to those persons who could not get loans otherwise. This could be a good motto to employ, if the loans did not come with such heavy price tags or at such a high risk.
Do your homework before jumping into a river of sharks, long sharks that is. There are other options available; it just takes some research to find out what and where they are. Sometimes its just a phone call away to a relative or a friend. Whatever you do, proceed with caution so that later on you wont have any regrets.
