Have you lost your job just before the holidays? Do you need some expensive dental work that you can’t afford? Has a recent home repair wiped out your savings account? If so, you have probably searched for a way to get through the hard times until you get back on your feet. Many companies are standing by waiting to lend you money if you’re in a financial bind.
Pawn shops require you to leave your valuables as collateral for the loan, but if you pawn your tools, how can you work? Payday loans are limited by your income. They require a pay stub as proof of your employment. If you’re self-employed, you won’t qualify for the cash. Car title loans have emerged as a very popular choice for people who find it hard to make ends meet or who need fast cash for a car repair or medical emergency.
A title loan is pretty simple. You sign over the title to your vehicle to the title loan company. They hang onto your title until you repay the loan. These lenders only accept used cars that have a clear title. While car title loans may be an attractive and quick solution at first glance, there are hidden dangers to using them.
The most obvious danger is losing your vehicle. If you have another emergency or lose your job, you may not be able to repay the loan on time. Some people become dependent on car title loans. They get pulled into a cycle of taking out loans and repaying them. Car title loans come with high interest rates and hidden administrative fees. Repeatedly taking out title loans can become very expensive.
Due to the high interest fees, it doesn’t take long for a small loan to become a big loan. It’s harder to repay the larger amount in one piece. Some companies will let you extend the loan by paying the accrued interest. If you do that, it’ll take a long time to pay off the original amount.
If you’ve recently lost your vehicle to a car title loan company, come by Greg Chapman Motors, located in Austin and Cedar Park. We’ll help you get a new set of wheels. We offer in-house financing, so if you’ve got a job, we can work up a deal.