HomeThere's this trip you have been planning with your buddies for months but your wife wants you to buy her an expensive necklace on your wedding anniversary. What do you do now? Do you skip the trip you have long planned or do you displease your wife? Do not worry; you can always avail of a loan against your car to raise the money, both for your trip and the necklace.
Simply keep your car as collateral, and avail of cash. You will continue to have possession of your car. Sometimes there are many myths, which deter us from availing of title loans. A simple look at some common myths and the facts behind them will clear up some misconceptions.
Myths vs. Facts
Myth 1: Title loans cause unnecessary debt and bad credit issues.
Fact: Title loans like other loans need to be repaid on time or else you could get a bad credit rating. Since you need a car to drive you to work, buy groceries etc., it is a valuable possession so it's best not take a title loan unless it is absolutely necessary.
Myth 2: You can avail of title loans from the first lender that you come across.
Fact: It is prudent to make an informed decision by exploring the market before you zero-in on a lender. A less reputable company offering title loans may induce you to borrow without actually spelling out the repercussions of defaulting on your loan.
Myth 3: The rate of interest on title loans is low.
Fact: The rate of interest charged varies from state to state, and depends on where the lender is located. The annual percentage rate (APR) on interest can vary from 36 to as high as 600. Monthly interest rates quoted may appear low - calculate the yearly rate to get the real picture. Lenders may also charge additional fees, though they quote lower interest rates.
Thus, while title loans seem very easily available and could bail you out in an emergency, make sure your decision is well thought out before you chose this option to meet your expenses.
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