3 Misleading Myths About Auto Title Loans

Just how does one survive in these uncertain economic times? Your guessed it right; auto title loans.  Simply secure your desired amount by keeping your automobile as collateral. It will save you the hassle of long loan application processes that are synonymous with bank loans. What’s more, you won’t have to worry about your credit score or wait for too long for the loan to be approved.  It only takes 24 hours. Unfortunately, car title loans are shrouded with several myths that can be misleading to the average Joe.

Myth 1: Titles loans cause bad credit issues and unnecessary debt

Fact: Like any other loan, the borrower’s credit will suffer if he or she defaults.  As such, auto title loans should not be singled out for bad credit scores and ratings.  Nothing bad will happen to your credit score if you repay on time. It’s that simply.

Myth 2: You can avail a car title loan from any lender you come across

Fact: lenders have different terms and conditions.  It is up to the borrower to explore the market well, gather the necessary information and choose his or her preferred lender.  Keep in mind that there are unscrupulous lenders who may induce you to borrow without being precise about the repercussions of defaulting. This could spell disaster for you. To be on the safe side, read and understand the terms and conditions of your lender before signing anything.

Myth 3: Title loans have low interest rates

Fact: The interest rate charged on automotive title loans varies depending on their location.  Most, if not all lenders quote monthly rates which appear low and attractive. To find out how much you will pay in terms of interest rates, calculate the yearly rate, otherwise referred to as the annual percentage rate or the APR.  Then keep in mind that some lenders may have additional costs in the name of processing fees. Take this into account so as to know how much you will pay in the end.