Most people are wary about getting a car title loan, and for good reason, too. These kinds of loans have a reputation of putting people in a worse situation than they were in before. But, like most things, there are always two sides to a story. So, here are the pros and cons of getting a car title loan.
If you have good credit, then there’s no problem getting any other car loan, but if your credit score is a little bit below satisfactory, then the loans you can make become extremely limited. Car title loans are easy because they do not check credit score. The only thing they would require is that the car whose title you’ll be putting up as a collateral is insured and in good condition.
Another requirement would be to not have any other outstanding loans or debts somewhere else. Fill all those requests and you shouldn’t have any trouble getting your loan.
The biggest drawback most people see when considering short-term loans such as payday or car title loans is the heavy interest. Most loan companies have different policies regarding their interests, so always go for the company carrying the lowest rate. Maximum interest rates vary from state to state. The maximum rate for Kearns, Utah would be different from Los Angeles, California. Find out the maximum rate your state carries, so you know whether a company is putting a reasonable interest on your loan or not.
Having a car is really a necessity these days and putting up your vehicle as collateral for these loans might cause you bigger problems in the future. You should really think about whether you really need this loan or just want it for some quick purchase you’re about to make. There are alternative loans you can take if you really don’t want to risk losing your car. Do a little research first and find out what kind of loan is best for you.