During times of adversity, one has the option of pursuing a car title loan. It is not only a good and a convenient way to arrange some cash, but it is also a hassle free and uncomplicated. But, you should generally avoid such loans in order to save yourself from losing out on money instead of your car. Car title loans might attract you, but it is not a sensible option taking into consideration the amount of risks involved with it.

Interest: It might seem like the grass is greener on the other side, but make sure that it is actually feasible for you to pay at the exorbitant rate of interest that is charged with such car loans, which are nearly more than a 100 percent annually.

Car as a lien: In such types of title based car loans, you would not only have a high interest, but you may also have to keep the car at stake. If there comes a time when you find it difficult to re pay the loan, you would have to surrender your car, which may have been your dream car.

Fees charged: There are various kinds of fees that are attached to a car title loan. Processing fee, late payment charges, lien and roadside assistance can be some of the extra charges imposed on you. In case of some money lenders, you might even have to pay a repossession fee which is illegal yet widely practiced in the industry. You must, therefore, read the documents properly before applying for a title based car loan.

Shorter time duration: In case of such car loans the money lenders ask you to pay in a relatively shorter span of time varying from two to four weeks. Generally, this tends to lure the borrowers initially but the high rate of interest does not let allow to pay on time and this debt cycle continues.

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