There are some concerns spreading as regards the car title loans which are loans secured by using the car title as collateral and possibly the extra keys of the car. It is a very convenient way for borrowers to get quick access to cash without credit check just that the loans can carry an interest rate that is up to 300% or more.
Car title loans is lesser known when compared to payday loans or a high cost mortgage. Car title loans are also competition for the banks and other financial institutions. And as a matter of fact, car title loan industries also boom in the areas where there are no banks located.
So how do you get to balance the weight of a fast and convenient loan to the extravagant high rates of interest? The article is written to present the readers with information that relates to the positives and negatives of the car title loan industry.
There is a legislation currently going on in many states that would call for stringent laws to rule the car title loan industry. There are lobbyists who represent these companies that are working to ward off these laws. Some believe that it is a start but we have so much work to do.
Now let us consider for a moment if someone just got involved in an accident and they really need money to pay his bills but they have no savings, no family to ask for help, no line of credit for a bank loan.
This person need money as quick as possible and then decides to get a car title loan by using their car as the collateral especially when the car is not damaged too much from the accident. But a after a while, they are unable to make the payments monthly and when the balance, fees and interests carries over for subsequent months they have their cars repossessed.
At this stage the person is not just sliding downwards the spiral but has fallen completely. So, it is very important you consider your payment option or payment plan before opting for a car title loan.
Before applying for a car title loan, you should estimate the wholesale value of your car for yourself with use of the Kelly blue book (KBB). KBB is a very popular resource to determine the value of a used car, this research tool allows you search for the make of your car, the model and year as well as you can add the appropriate options to get the car’s value.
The trade-in value that is the wholesale value equivalent of the car will be the most instructive value when meeting a lender because they would factor in this calculation to determine how much they can afford to lend you.
You get to know the maximum amount you can borrow using your car when you estimate the worth of the vehicle. There us absolutely nothing wrong with this service just that we need to make rational decisions on our own to pay back the loan when due.