Emergency Cash From an Auto Title Loan
Getting money using auto title loans need not be a problem, if you take the time to understand the risks. Everyone runs into financial emergencies. Medical bills, breakdown of a critical system at home like air conditioning or heating, even emergency car repairs. In America today the sources of short term credit are drying up rapidly. The new credit rules passed by the Obama Administration intent on eliminating abuses by banks, have instead caused those abuses to become more widespread. Banks are gouging their customers now. The idea seems to be, drill the consumer today before the government takes away your right to in the future. Wells Fargo announced recently a more than 20% hike in their credit card interest rates, based on this principle. The bank was unusually honest about what they were doing. It was strictly to beat the new rules.
Here are key questions for you to ask when you are considering an auto title loan as an emergency source of short term cash. Check the repayment rules. Is there a pre-pay penalty? What amount of interest are you being charged? When is the payment due? When do you get your title back? What’s the total cost of credit? What happens if you DON’T pay the loan back?
It is vital to your own self interest that you completely understand all elements of your agreement with the title loan company. Don’t sign any documents until you are absolutely clear on every term.
Auto title loans are a solid way to get emergency cash, precisely because you are putting something you own on the line. You are “selling” you car to the auto title loan company. You’re selling it for way less than its probably worth on the open market. You can “redeem” your title by paying your loan, with interest. Its really a simple concept, but one that many people under the duress of an emergency fail to understand the major implications of failure.
Qualifications for obtaining one of these loans are pretty straight forward. Be 18, have a job, a home address, and clear title to your car. If you meet the qualifications, and your car is accepted into the program, you can get your money quickly. Recognize you may only receive a maximum of about 50% of your car’s market value with an auto title loan. That’s the risk premium the lender has in case you default. If you don’t pay the note as agreed, you lose your car.
Getting money using an auto title loan need not be a big problem if understand the risks involved and you know what questions to ask. When people have money problems, we often don’t think of the right questions to ask. This article should give you the knowledge you need to understand your rights and what can happen to you financially in these transactions.