A lot of concern has spread concerningcar title loans, these are loanssecured by the title of your car and possible an extra set of keys to the car. Car title loan is a convenient way for borrowers to get quickmoney without checking your credit rating, but the loans have an interest rate that is very high. Car title lending is less popular when compared to payday loans and a high-cost mortgage. Car title loans are also competition for the bank due to the ease and simplicity of the loan approval. In fact, the car title loan industry does well in areas where there are no banks are located. So how do you balance the weight of a quick, convenient loan to the extraordinary high interest rate? This writeup aims to present the reader the information as regards to the advantages and challenges of this industry.
There is currently a legislation going on in some states that would demand stringent laws to rule over the car title loan industry. As you read this there are people who present these companies that are working to ward off the laws. Many believe that is a start and that there is much more work to do afterwards. For the most places, small loans are regulated by state and local governments. Right now,car title lenders are in operation in more than half of the states.
Now let us think for the moment of someone who just had a car accident and there is a need for money to pay the bills but there are no savings, no family to ask for assistance, and no line of credit for a loan from the bank. This person needs fast cash and then decides to opt for a car title loan by putting up his car up as the collateral (if the car is not damaged too much from the accident), but after sometimes they not able to make thepayment monthly and after the balance, fees, and interest carries over from month to month enough times his car is repossessed by the lender. Now he has injuries, has no funds, no car, and a huge debt hanging over his head. At this junctionhe is no just sliding down the downward spiral but has fallen off completely.
So, what exactly is it that the person could do? Well some funds in a savings account for a rainy day would have been great option. A friend or family member to contact in a state of emergency would help too. I guess it would be based on the degree of security you require. The best option would be to have really good insurance and some savings to cater for any deductibles.
In conclusion, I believe that there is nothing wrong with this type of loan. I believe we need to decide rationally on our own and not rely on making a new law all the time people get irresponsible. Utilize the service knowing for sure that you will have the money to pay it back in time and have a plan to avoid this type of problem in the future.