Title Loans - Our Big List of Pros and Cons - Baltimore Post-ExaminerBaltimore Post-Examiner

Title Loans – Our Big List of Pros and Cons

Do you need some fast cash? One of the best ways to get a fast influx of cash to meet your short-term needs is the car title loan. However, as suggested by the name, a title loan means the title of your car will be required by the lender as collateral.

To learn more about car title loans keep reading this article:

This quick cash can help get you through a rough patch as long as you know you will be able to pay off the loan on budget and in time. However, that requires that you know everything possible about car title loans– both of their pros and cons – before you get started.

Pros: Individuals with bad credit can qualify for a title loan.

It is tough to secure a loan if you have bad credit. Lenders take a look at your credit rating and will either tell you they can’t help you – or will charge an exorbitant interest rate so that the loan isn’t worth it any longer.

On the other hand, title loans make it possible for you to put up your car as collateral to get a loan even when you have bad credit.

If you are attempting to rebuild your finances – and are doing that without having a credit history to rely on – in some cases a title loan might be the only option that is available for you.

Con: High APR

Although getting a fast influx of cash can be very helpful, you also need to understand what you are getting into in terms of the annual percentage yield, or APR. If you don’t think you will be able to pay your loan back in time, that interest will add up very quickly.

Fortunately, if you are able to pay your loan back in time will mean that less interest will accumulate, which will help to keep the loan manageable. If you default on your loan it can cause you to lose the title that was used as collateral – your personal car.

Pro: Fast cash!

Title loans are never a free lunch, but they do provide relief by the fast cash that they provide. So if you have an emergency, an auto title loan may be a life-saver for you. You may have money sometime in the future, but you may not have the ability to pay something right now, meaning you need to have a quick influx of cash to get through a tough spot.

It is not a big risk to put the title up on your car as collateral if you are sure you can pay the loan off on time. And since no credit history is required for this kind of loan, you will not need to worry about your financial history. What is important right now? our future.

Con: Risk of repossession 

Anybody who tries to tell that there are zero risks with a title loan is not telling you the truth. If you pay your loan off in time then you don’t have anything to worry about. However, you need to know from the start that the “title” part of the “title loan” is the collateral that you are required to put up for the loan. You will lose the title if you do not make your loan payments. Then the car will not be yours, it will theirs.

Like the loan’s high-interest rate, this usually won’t matter as long as you are confident you will be able to pay the loan off in time. So if you have money come in and can predict how much you are going to have in the future, then there is a low risk of repossession. However, if you are relying on an additional influx of cash it might be a bit risky to take on a title loan.

Pro: It isn’t a payday loan.

Payday loans are known for being predatory and tend to charge outrageously high amounts of interest. So if you prefer to not get a payday loan, then a viable alternative can be a title loan.

Since you don’t need to have a high credit score in order to secure this type of loan, you find the terms are a bit stiff but still fair. This means you can get a fast influx of cash that you need without needing to worry a lot about the risk. This is because it isn’t a payday loan so you are not sacrificing your future paychecks just because you need to have a fast injection of money.

Con: Bad fees are charged by some companies

You need to watch out for extra fees. Be sure to work with a reputable lender such as TheNetLender if you want to get this type of loan since some lenders might attempt to make sure you are unable to pay your loan back through adding extra fee after extra fee onto their terms. Be sure that you read the fine print at the start and you will be able to catch those fees in advance. You don’t want to be surprised by something that you should have realized ahead of time.

Pro: A title loan is easy

Since there is no credit check involved in the process, it is easy to secure a title loan. If you make sure to get your loan from a reputable lender and have the collateral that is required you will be surprised at how fast you can get cash in the $2,500 to $25,000 range. When working with TheNetLender, you might also discover that some of the cons are eliminated by the favorable terms and lower APR that make it a more reasonable title loan.

There is always some risk that is involved with any loan. However, when you work with a good lender, know all of the important details ahead of time, and have a realistic expectation of what your future income will be, then a loan can be a very powerful tool that will ensure that you have the money that you need right now. It just takes a bit of common sense and foresight to ensure that both parties benefit from a title loan. This is why we felt that it was important to provide you with the pros and cons that come with title loans to help borrowers better understand the way that title loans work.

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