With the holiday season now in effect and money likely to be tight, one should be wary and very cautious in taking out car title loans.
Normally used as a type of secured loan where burrowers can use their own vehicle’s title as collateral in exchange for some short-term cash, burrowers need to be aware of the potential long-term consequences. In doing so, burrowers allow the lender to place a lien on their car title and briefly surrender it in exchange for a loan amount.
Granted, these are tough times, and especially with the holidays coming up and the need for extra money, but if the loan is not paid in full the lien then becomes property of the burrower, who then can repossess the vehicle and sell it to repay the burrowers debt.
Before considering this route, potential burrowers need to consider a wide range of options such as burrowing from family, asking for a paycheck advance, working out a payment plan or arrangement before taking out such a short-term loan with a high amount of interest, as high as 200 percent.
Before taking out that car title loan, be sure to have all of your proverbial ducks line up in a row first, before putting yourself in some serious long-term financial risk first.