Auto Title Loans Explained
Short Term Auto Loans
Auto title loans are short term loans designed to provide people with immediate funds. These loans usually require repayment within a period of two weeks and the fees are quite high, making them a bad choice for borrowing money over a longer period of time.
The term, ‘auto title loan’ is due to the practice of giving the lender the title to your car as collateral for the loan. If the loan is not repaid on time you risk losing the car. Auto title loans are also known as ‘pink slip loans,’ which refer to the actual color of the car title (pink).
It is relatively easy to obtain an auto title loan; plenty of online sites and companies offer ‘instant lending’ and ‘money today.’ However, be very careful when considering an auto title loan because there may be hidden fees and costs. Be aware that rates rise astronomically if you are late making a payment or cannot repay the full amount by the scheduled date.
People who have bad credit might see an auto title loan as a viable option. Keep in mind, though, that risking your car on a loan can be a bad decision; for example, if you rely on your car to get to work, and the vehicle is possessed by a lender, then you are left without transport to your place of employment. No matter what you decide, be sure to plan well because debt can easily spiral out of control.
If you need money but don’t want to risk losing ownership of your car, try a payday loan. Payday loans are also short term loans, but they work by requiring a post dated check written against your next pay check. The lender gives you the money, charges you a lending fee (often extremely high) and cashes the check on your next payday.
If you’re having trouble repaying your debt, there is always the option to ‘roll over’ your loans. Rolling over means that you extend the loan for a longer period of time, which in turn guarantees the lender more money in the long run. Exercise caution when rolling over any loan, as it can often lead to deeper debt, high interest rates and multiple fees.
Some valid online resources that are worth a visit include:
· Capital One offers instant online estimates at www.capitaloneautofinance.com. Visit them for valid quotes and loan assessments.
· Bank of America provides different car financing options on their Web site at www.bankofamerica.com.