State News In Support Of Car Title Loans

In January of this year, the state of New Hampshire passed a bill, contrary to the objection of the governor, which will allow car title loan companies to charge 25% interest each month. Governor Lynch expressed his concern that these excessive rates would harm family incomes, affect communities, and hurt the economy of the state. Congress established a 36% annual interest charge back in 2006 for loans towards military, which is also the current annual rate. Those who supported the bill made arguments that the car title loans are necessary to give more options to people who need short-term loans. The opponents warned that the loans would trap the consumer into high-interest loans which cannot be repaid.

January also proved busy for the state of California which made attempts to regulate car title loans, but failed. The bill targeted the title loan companies which loaned money at interest rates between 72 and 180 percent to those who have poor credit low income and need fast money. Currently, California does not cap the interest rate charged on loans of more than $2500. The supporters of this bill were hoping to require lenders to include additional disclosure which would educate the borrower of the total cost over the life of the loan. There were also hopes to ban the structure of car title loans as both sale and leaseback transaction. The opponents to this bill argued that limiting these loans would take options for fast money away from residents and that the high interest rates are necessary for these loans because the risk is all on the lender.

Illinois was another state which proposed limitations on interest rates charged by car title loan companies. The legislation was looking to regulate lenders to a 36 percent rate instead of the maximum rate of 300 percent. Borrowers who took out a $1000 loan end up repaying the loan plus $2000 in interest. Illinois borrowers paid more than $150 million in interest to car title lenders in 2011. The Illinois bill failed to pass on the argument that predatory lending laws were passed back in 2010 and there hadn't been enough time for those to work. The critics of car title loans argued that the loan rates were abusive, toxic and led borrowers into bankruptcy. Despite their efforts the bill failed to pass into law.

Predatory lending has been and will continue to have critics and supporters. Consumers are accustomed to having available options. Critics oppose the interest rates of car title loans as the demise of family budgets. The argument against the cost to repay the loan which creates hardships which could end up as a family losing their vehicle. Losing this valuable asset will create multiple problems with daily schedules. Arguments in support of the high risk loans are for the high interest loans as one more options a person has to get short-term loans. Either for or against, continued education efforts are needed to help people make better informed decisions when it comes to their money.

Car Title Loans: Help With Debt

Bad credit is a trend which has swept across the county affecting many. Companies have been lying off workers to protect the business while others have had to close all together. These closings and layoffs have left hundreds of people in some areas out of income and searching for new ways to finance their household budgets. The unemployment rate has made it very tough to find jobs, but debt does not carry a pause button. People who do find jobs may not make as much to keep up budgeted demands. Everyone has a story explaining why they need help with rebuilding credit history.

When you are not able to pay on your debt, your creditors will send negative reports to the credit agencies. These reports will lower your credit score and keep you from financial opportunities with banks, credit unions and lines of credit with credit cards. Your money requests will be denied or loan amount will be lower than what is needed. When a cash advance is not enough and the other options are not available to you, a car title loan is an option when you own the title to your own vehicle.

These title loans are quick and can get you more money than a payday loan so your bills can be paid and you can start working on rebuilding your credit. When you can pay late payments sooner than later, your credit will be less affected. Showing efforts to keep a good standing with your accounts will get that score moving upwards even faster.

Your credit score does not interfere with a car title loan. Your vehicle is used for collateral to secure the loan. The title lender will figure the value of the vehicle and base your loan on that amount. Depending on what lender you choose, you can get a loan from 25% to 50% of that value.

A great way to help yourself is to use this loan and pay off as much debt as you can. Paying off accounts that tax your budget each month will allow you to regroup and amend your budget. Your title loan will need to be paid off quick, once it is, you will be looking at having a much smaller demand on your income. The faster you get things paid and your debt to income ratio lowered, the less you will be charged in interest and creditors will start looking at you in a different light.

Once you get a car title loan, you will want to focus all your efforts in getting it paid off in the fastest manner possible. Know how the lender does business and be aware of any extra costs if paying your loan off takes longer than planned. Ask questions prior to signing the contract and don't let yourself get pressured to sign if you are not satisfied with the answers. There are plenty of companies offering auto title loans whether it is by store or found online.

Car Title Loans: Advantages And Disadvantages

The ease of obtaining a car title loan has made these types of loans very attractive to people who are having trouble with their finances. It does not matter what your credit score is, the loan is based on the value of your vehicle. If the value of your vehicle is equal or greater than the amount of money you are requesting in your loan, then you will have no problems being approved. The lender will inspect your vehicle and determine the worth.

Most auto title loan stores will have information on the Internet as to what you need to have with you when you visit one of their locations. When you can bring all the documentation required of you, you can have your loan in hand in as little as twenty minutes. Some businesses will have applications online for you to fill out and send in making the process even easier once you get to the store. There is no credit check or background check involved in the approval status. The vehicle is your fast access to cash.

These types of loans are secure, meaning you will hand over the title of the loan for the period of time the loan is being paid back. Secure loans use collateral to speed up the process and make lending less risky. The collateral is the trade off for a fast loan without the long approval process and high risk for denial without it.

Auto title loans are not after your car. You can drive it off the lot with the money in hand. You get continued use of your car or truck while your loan is being paid off. Lenders of this nature use the secure loan process, meaning use of collateral, as a guarantee that you will repay your loan. Financial institutions who give unsecured loans, with no collateral involved, are basing their approval on your credit history as they are lending money on the assumption you will pay it back along with the interest payments.

Those people who have bad credit are not being approved by banks and they are finding a higher success rate with car title loans. A bank will most likely turn you down if you have bad credit and request thousands of dollars to consolidate your debt or to pay bills. With an auto title loan, you will get what you need without the hassle.

Disadvantages

Car title loans are given on the notion that you will pay them back in a short period of time. The interest rate is low in the beginning, but if you continue to extend your payments further out, the interest rate grows. Extending your loan too far and then not being able to afford it, will put you at risk of losing your vehicle. The lender will then sell your car to pay back the loan. You will have to make up any difference as well as be without a car.

Cautions

Do your shopping if you have decided that a car title loan is your best access to the money you needing. Find a lender who has the lower end interest rates. Understand the documents you are signing. When your credit is bad, having a car does give you access to fast cash, but be realistic about how you can afford to pay it back. Take your time to work through your end of the transaction to make sure you can keep up with the payment schedule. Going the extra step will make it a win win situation for you, getting money you desperately need quickly, continued use of your collateral, and paying your debt off in a favorable time limit.