Should I Go For Car Title Loans?

You might be familiar with payday loans, car loans, specialized loans, and others. What about car title loans? Now, what's this? It's SOMETHING DIFFERENT!

Imagine this: You need a loan. You place your car as collateral and give a spare set of keys to the lender when you get the loan. In case you fail to pay the loan, the lender will sell your car and repay the loan.

This is what happens in car title loans. In certain states, the lender keeps all the proceeds of the sale, even when the proceeds are more than the loan value.

What About Interest Rates?

Good question! However, the answer might not sound too pleasing! Usually, people think that, with car lease, the interest rates on car title loans would be lesser than when they ask for cash advance. Sorry, folks, this is not so.

The average rate of interest on car title loans nationwide is around 300% annually! This hardly gives you a chance to negotiate on such car loans. Another hard fact is that the amount of car loan hardly signifies for more than a tiny proportion of the car value. In the loan industry, a loan representing just half of the car's value is considered to be liberal. Hard to digest?

What About The Fee?

Think payday loans. Think car title loans. Both are same when it comes to fee. If you are not able to pay the car loan at the due date, you can extend the date, but only after paying an extra fee. And, hold your breath; in some cases, you might end up paying a fee that is higher than the actual value of the car loan!

And if you don't pay, you lose your car!

Who Benefits?

Unfortunately, car title loans favor lenders. In case you forfeit the loan amount, it's the lender who makes the most of your predicament. They get a chance to earn something with a significant value, which is more than the loan value.

The only key to get past through such car loans in a smooth way is to be experienced in this field, have control over your finances, and be smart enough to get your car back! And if you lack the "talent" for getting car loans, it is advisable staying miles away from such a kind of loan. It's better and safer to borrow from friends and relatives or go for easy online car loan. Even buying a car through credit card is better than this!

Leave the car title loans for financial wizards who are apt in handling the tricky world of borrowing and lending.