Avoiding Car Title Loans

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Avoiding Car Title Loans It is always nice to get some "free" cash temporarily, but while a car title loan may seem like a safe way for you to get your hands on some it can actually be extremely dangerous. This on the surface appears to be a great way to get no credit check loans but can actually be overly risky for anyone. While short term loans such as these are thought to get you out of a tight situation quickly they can just as easily put you in a very difficult situation long term.

What are Title Loans?

Car title loans are going to be a quick way for people with a paid off vehicle to get a short term loan. Loans of this type will range on average from about $175-$2,500. The average loan length is going to be just about 30 days typical of most short term cash loans. The interest rate that can be charged will vary based upon state laws, but since those laws are not regulated on a consistent basis that is where some major damage can be done on your part.

It has even been recorded of interest rates going as high as 30% so while it may get you some quick cash it can have some very expensive fees to come along with it. These lenders usually can be found in a variety of storefront locations that offer check cashing and pawn loans. They also can be found at some used car dealerships.

Biggest Risk

The biggest risk about all of this is that you are putting the title of your vehicle up. By doing that you make it possible to lose your vehicle over a very small loan. So, is it really going to be worth the risk just to get some cash in your pocket? Very likely that is how you get to work and back so you will be putting your livelihood on the line as well. These loans are a massive risk so make sure that you think long and hard before you make any decision to take one of them out.

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Do you meet the basic qualifications?

  • At least 1 year with current employer
  • A minimum income of $1,500 per month
  • No repossesions within the last year
  • Any bankruptcies must be discharged
  • Money down may be required, but not in all cases
  • Must be a current resident of the U.S. or Canada