The possibility that a car title loan will put you in debt is there. Usually reason people get title loans in Jacksonville or wherever they’re located is because they are already in debt. Chances are you need to use your car as collateral just so someone will give you a loan. Most people use car title loans as a one of the last resorts for quick cash. They are high risk but your know that going into the loan. So really if anyone is putting you in debt it is yourself. Do not agree to something you know you cannot payback. Money seems desirable at the time and you must need it. Don’t get sucked into the loan if you know you are going to fail. You must understand what exactly you are getting into before you commit.
What is a car title loan?
A car title loan simply uses your car as collateral to secure a loan, specifically called a short-term loan, for part of what your car is worth and the title loan as well. You must own the car and have the title in your name. You will then sign over the title and hand in your keys in exchange for the loan.
You must know that when getting a title loan there is no credit check or payment history check. That is why title loans are useful for people who are not able to get a loan at a bank. Since they are as a company taking a risk that you intend to payback the loan in the allotted time frame, you must abide by the contract. Some lenders will only give thirty days to pay back the loan. So make sure you are not getting more of a loan than what you need. Also there are always fees attached to the loan. Make sure you ask the lender what fees you may be charged, interest rates, and extensions of payment. Not all lenders are the same. So you must ask questions and maybe shop around for your best option. Some lenders even let you keep your car during the process. If you know you may not be able to pay back the loan when expected, call and let your lender know that you need an extension. Fees are usually added when extensions are as well.
The reality is that if you are unable to abide by the contract of your title loan then yes you may very well be in more debt than you wanted. Knowing that you could lose your car should definitely make you more cautious with the repayment of the loan. It’s all about you making a wise decision that the car title loan will not put you in debt or further in debt. You can be easily distracted by the marketing techniques of the lenders but stand your ground and know the costs. Many people have received the loans and have now lost their car due to the fact they made the poor decision in taking the loan.
Stick to the repayment plan and you should expect to be paying for more than what you received from the loan. That is true with any loan. Be careful.