What in the World is an Auto Title Loan?
Contributed by Melanie Vannuys
What In The World Is An Auto Title Loan?
An auto title loan is a dangerous financial offer. In keeping with the tradition of a home equity loan, an auto title loan allows you take the title of your car to a lender and exchange it for cash. You are then given a certain amount of time to pay the loan back. What happens if you can't pay it back? The lender gets your car - plain and simple. Loans of this type are rarely more than a few hundred dollars unless you're driving a Lamborghini or something similar, and even then these types of lenders are reluctant to lend large sums of money.
Can An Auto Title Loan Help Me?
I guess if you look at it in terms of desperation, an auto title loan can help. For instance, if you only get paid once a month - which is common - and an emergency comes up in between pay days, you can take your car title to a lender and they will give you cash - for a small fee of course. Then when you get paid at the end of the month or beginning of the next, you can pay the lender and your car is free and clear again.
If you want to look at that way, then by using an auto title loan, you're saving yourself late payment fees and additional finance charges, however, would those fees be less than the fee the auto lender is charging?
Where Can I Get An Auto Title Loan?
I would be remiss if I didn't tell you where you could get one of these loans, however, you need to think twice before you do it. If your situation is desperate enough to put your car on the line to get cash, then you have bigger problems than you realize. If you think your situation is enough of an emergency to justify an auto title loan, just think how big the emergency will be if the lender repossesses your car!
