Mar. 21, 2008 - Auto Title Loans
If you happen to own your very own car, an auto title loan can be a great source for money during a cash crisis.
So long as you own the title to your vehicle all free and clear, without any pending liens against the car, you can easily qualify for a title loan within minutes. No credit checks are required since your car is used as collateral for this type of loan. Some lending insitutions will also require that you give up a spare set of your car keys in the even that you default on the loan and that they need to repossess your car.
Title loans are typically intended for a short term use, with the payment due within anywhere from fourteen days to a month from the day that the loan was issued to you. If you happen to not have the funds to pay off the loan you would have to roll over the loan for another payment period. Rollovers generally are often rather large interest payments that are paid to keep a loan from defaulting and showing up on your credit report. Little to no principal is paid off during this time. If you roll over your loan just a couple of times you can end up having to pay many times the amount of the loan from interest and fees alone. The annual percentage rates or (APRs) on many of these title loans are in the triple digits.
For lending insitutions, the title loan is a very low financial risk because potential borrowers will often take out the loan for far less the value of their vehicle. Potential borrowers are capable of getting up to the fair market retail value of their cars with a total loan though.
The auto title loan can very well be a high financial and monetary risk for consumers, especially for those that borrow more money than they actually require. One of those missed payments on an auto title loan could easily result in your car being repossessed immediately. If your car ends up being siezed in some states, the lender can possibly be allowed to keep any additional funds that are generated by selling your vehicle about ratail value and you could very well still be responsible for paying back the loan in full.
Dependant upon your circumstances, the car title loan may be a very easy thing to get and quite possibly a nightmare to get rid of. Be very careful when considering your options before taking out one of these loans, because in the end it may be more trouble than it is worth. Be certain to check out other alternatives for getting yourself out of a financial strain because an auto title loan could very well be more a burden than anything to you.
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