Risks and Alternatives of Car Title loan

Risks and Alternatives of Car Title loan

A car title loan is a short time loan in which your car title will be used as collateral and you will get a high amount of money for it. However, your loan amount depends on the market value of your car. You will get 30 days to repay the loan with interest. If you failed to repay you will get the next 30days to pay with rollover procedure. In the rollover procedure fees and interest will be added with the main amount.

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Applying for the Car title loan is easy.

  1. Search for Title Loan companies.
  2. Choose the best of them.
  3. Fill their online application and formalities.

 Requirements for a Car title loan:

  • Your residential proof
  • Your Driving license
  • registration and insurance-related documents of your car.
  • income proof

 

Risks of a Car Title loan

Contents

Interest Rate

the interest rate of car title loans is too high. If you failed to pay your loan for the first month the loan amount will be increased for the interest and fees. And the same in the next month for the debt cycle. Therefore the more time you take the more you have to pay. In the end, you can lose a lot of money.

 

Losing Your Car

As an agreement, if you miss one payment that can lead you to lose your favorite car.  Out of every 100 borrowers at least  20 borrowers lose their car. The lender will sell your car to get the money.

 

You can’t sell your car

When you are taking a Car Title loan that means you are getting the money for your car title. And the lender will be the new car owner. So you don’t have the right to sell the car. And doing this is an illegal activity.

 

Alternatives of  Car Title loan

  • Ask your friends and family for a  loan with the proper agreement.
  • Search for Non-profit organizations, charities. Because some of them provide emergency cash if you are eligible as their rules and regulations.
  • take loans from the bank. Banks’ loans are the most expensive. But they are cheaper than the car title loan.
  • Take credit loans or personal loans from the bank using a credit card.
  • Search for any part-time job and work hard to earn some extra money.

 

Conclusion: If you really read money try to apply all the alternatives to the car title loan. Keep the Title loan as your last hope. There is not any good outcome. In fact, in the end, you will be depressed to pay a high amount of money with huge interest.