Auto title loans these days are the new source of emergency funds when one suddenly finds him or herself cash-strapped. In today’s economic climate, becoming cash-strapped is nothing new to most people. Fortunately, there are a number of viable options that can be opted for to help ease a sudden financial problem when it occurs. One of the most popular financial easing options these days is taking out a title loan, in which the lender makes a loan against your lien-free car. Simply put, the lender will offer you instant cash in exchange for your car title. He or she will hold the offered title as collateral against your vehicle.
Should you go for a title loan when you suddenly find yourself cash-strapped?
Absolutely, you should! However, before rushing out to the nearest lender to get a title loan, note that these sorts of financial aid come at a higher interest than the ordinary bank loans. As such, don’t be surprised when you find yourself paying as much as twenty five percent interest or even more upon taking out the wanted loan. A 25% interest rate easily adds up to more than 300% interest in a years time. So be absolutely sure that you need the money and you can comfortably pay it back prior to opting for a title loan.
Before taking out the loan, remember also that the lender can easily repossess your vehicle if for one reason or another you are unable to meet your part of the bargain, which is paying the loan back within the stipulated time. Instead of repossessing your vehicle, you can arrange for the loan to be rolled over for another month, though it means paying additional interest on top of what is already owed.
All in all, this sort of a loan is ideal for people who would otherwise be unable to get financial aid elsewhere. The loans in most cases work out well for all parties involved; the lender providing a much needed service and a borrower being able to meet his or her financial obligations in a time of crises. Best of all, no credit check or income verification is involved.