Title Loans

If you find yourself in a money crunch, before considering a title loan, make sure that you know exactly what it is you are getting yourself into.

The average title loan is a small loan, often used in emergency situations, for which a consumer exchanges her car title and duplicate keys for collateral. These loans typically feature annual interest rates in the triple digits and require almost immediate repayment (usually, within one month’s time). These loan terms often lead to unmanageable debt in the form of balloon payments, and the constant threat of repossession creates stress that only causes the consumer more pain and anxiety—-the loss of a car means the inability to get to work or manage her healthcare, which leads to further debt.

Like pay day loans, title loans only benefit the lender and have the potential to cost you thousands in interest payments. Before borrowing through a title loan, consider a consolidation loan, borrowing from friends or family, or another less risky means of obtaining the cash you need. Good financial planning will usually eliminate your need for fast cash, allowing you to utilize safer means of obtaining the cash you need for more long-term goals.