Are Auto Title Loans Really a Good Idea?
You’ve probably seen the signs for auto title loan businesses. With their bright signs – some of which flash in neon – and promises of easy and fast cash, they’d be difficult to miss. But is doing business with these lenders a wise move? We’ll talk about it in this issue.
What Are Auto Title Loans?
Unlike payday loans that will typically come due when your next paycheck arrives, you’re required to put up the title to you car or truck as collateral for an auto title loan. Most are made to people with poor credit but who happen to own their vehicle outright. Just like a payday loan, an auto title loan must be repaid in full on the due date or the loan is renewed and a hefty fee is attached.
How Much Do The Loans Really Cost?
A study carried out by the Consumer Financial Protection Bureau and published in US News and World Report has found that people seeking emergency loans are being hit with interest rates as high as 300% by some title loan lenders.
Most Loans Aren’t Paid Off
According to the study, the typical auto title loan was about $700 at a 300% interest rate. Most borrowers who opt for this route are more likely to renew the loan rather than paying it off. Perhaps worse than that is that 1 of every 5 of the auto title loans ends up with the borrower’s car being repossessed – greatly damaging the person’s ability to work and eventually repay the loan in full.
Let The Oswalt Law Group Help You With Getting Rid of Crippling Debt
There are far better ways to get out from under crippling debt than relying on auto title loans. Since no two situations are alike, we urge you to take advantage of our expertise in debt relief and law by calling us at The Oswalt Law Group. The first consultation is always free, so call us at 602-225-2222 for a free consultation.