The Danger of Getting Car Title Loans
One of the worst types of car loans you can ever try to get could be the so-called car title loans. Car title loans may be promoted by the lenders offering them as loans for small emergencies ? but the facts show that car title loans frequently only ensnare the borrower in debt that he can never climb out of.
Why do car title loans represent the worst that bad car loans have to offer? Well, for one thing, the usual type of car title loans will demand that the borrower pay back the loan in a month but the interest rate may reach the triple-digit level. And even then the loan that is granted to you amounts to significantly less than the true value of the vehicle you will be acquiring ? which means you may have to borrow to pay of the car title loan and then borrow again to meet the difference between what you can pay and what the car costs. In essence, you get buried in an avalanche of debt which may be nearly impossible to get out of.
The problem with lenders who offer car title loans is that they get rich easily this way and then lobby for laws that favor their way of doing business ? and often succeed because politicians may depend on them to make their quota for campaign contributions. There are also lenders who do not say outright that they offer car title loans to avoid legal hindrances ? instead, such lenders may couch the description of their business under different names when in reality, if you take out ?ar title loans you are using the title of your vehicle as collateral or security for the loan. And since the lender may be wily, the rates and terms you agree to practically guarantee he will eventually gain ownership over your prized vehicle, and you buried up to your eyeballs in unbearable debt.