When in urgent need of money and faced with situation like bad credit, people often take up loans like the payday loans or the car title loans. These offer immediate relief from the cash crunch are very costly loans because of the high interest rates and tougher repayment terms on them.

car title loan

More about car title loans

There’s only one eligibility criteria for the car title loan and it says that you must be the sole owner of the car and there should not be any loan on the car. Once you take the car to the lender they evaluate the car’s present value. Generally it is done using the blue book which is meant for such evaluations. The loan requires a small application form to be filled out. These loans are quick and are generally given for a very short duration often ranging from a few weeks only. The owner of the car continues to own the car as earlier and agrees to pay a fixed amount to the lender as per date decided under the loan agreement. The interest rates on the title loans are pretty high and one should take this into consideration while making the loan decision.

People often try to avoid these loans but when there is an urgency they look out for ways which can offer them quick solution and there they go in for the car title loans which offer them the required solution.

So why do people take car title personal loans for people with bad credit even though they know that these are not meant for them? Well the most obvious reason behind this behavior is, ignorance. People are not aware of the ways to avoid the car title loan. Here are certain ways which can save you from the killer car title loans.

Maintain a savings account: One of the best ways to prepare yourself for the short- term emergencies requiring little amounts is to maintain a savings account. One needs to allocate a fixed amount of their monthly income towards these savings accounts. Consistent efforts will build a corpus which can be easily used in the times of emergency. If we consider this against the car title loans , there are high interests to be paid and if one fails to repay the loan on time they are faced with heavy penalties and stand a chance to lose their vehicle in the act.

Maintaining a savings account might look like a cake walk. However, it is not. In fact people often pull out money for their expenses from the savings account. Instead of looking at the account for the future use they look at it as a source of funds which can fulfill their desires.

One has to maintain strict discipline towards keeping the savings account for the purpose it has been designated.

There are other ways too to tackle the urgent needs. These include the personal loans, loan against insurance policies, sale of stocks and even loan against securities.

However, if one has bad credit getting any other form of unsecured personal loans might be difficult. People then have to look out for other ways like selling off the unused stuff in the house to raise some cash etc. If you have some cash with you as savings but you do not want to use it for this emergency review your decision. Car title loans will not only require you to pay for high interest rates but any delay might lead to further increase in the interest rates and you might lose your vehicle too. It will always be wise to use the savings to avoid the car title loans.

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