Today’s guest post is from Jack Nolan. It’s a thinly veiled infomercial for car title loans.
Car title loans? Seriously? What happened to you guys? Control My Cash, my ass.
Hold on a minute.
Yes, getting yourself in a position where you’d even consider a car title loan means something went very wrong along the way. HOWEVER…
You’ve got to start somewhere. The Control Your Cash authors love to take long multi-day hikes with staggering elevation changes. If an aspiring hiker wanted to join us, we’d encourage her to come along. If she were 50 pounds overweight and had just quit smoking, we’d explain that she wasn’t quite ready yet, and needed to start off slowly before doing the Grand Canyon rim-to-rim.
How’s that for a cumbersome analogy? The point is, of course we largely discourage people from borrowing money at any rate larger than what they can loan any of their own money out at. And if you’re borrowing from a car title lender at 75%, you’re probably not going to find an investment that pays 76% that you can put that borrowed money in.
But if your credit’s shot, a car title loan might be the least bad option if you’ve got payments you absolutely have to make. Better to be indebted to a car title company for a couple of weeks and pay a lot of interest than to get foreclosed on. Think of the car title loan as the 1-mile urban stroll, and the American Express Blue Cash card as the ascent of Half Dome. If you’ve already damaged yourself, whether financially or physically, you’re going to have to endure some unpleasantness before getting to the good stuff. But the unpleasantness should at least be as constructive and helpful as possible. So take it away Jack:
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The recession has forced many people to seek alternate forms of loans when a cash emergency or financial crisis strikes. Before the economy took a turn for the worse and banks were bailed out by the government who instilled strict lending regulations, regular folks could walk into a bank and secure a cash loan with no trouble at all as long as their credit was in pretty decent standing. Now it’s nearly impossible for someone to get a loan from a bank even if they have perfect credit and means to afford a loan.
Max Cash Title Loans lets people who need a title loan have companies compete for their business. The company helps borrowers across the country find the lowest interest rates possible, forcing other title loan lenders to become more transparent about their policies and compete against other title loan lenders for the borrower’s business. Loans are now more widely available and shady title loan companies are dwindling, but you still have to know what you’re getting into when seeking out a short term loan.
When banks started turning down loan applicants at the dawn of the recession and a global financial panic started to sink in, the floodgates opened for all sorts of lending companies to provide a needed service to the masses. Soon the term “predatory lending” became popular, with payday loan companies and car title loan companies leading the way in chasing people down a rabbit hole of inescapable debt. Such lenders acted just like the banks whom they were trying to supplant, placing their customers into an endless cycle of debt with no manageable options to eventually pay off their loans.
A payday loan company lends small amounts of cash to borrowers, which they’re expected to pay back by their next payday. A typical payday loan usually goes like this:
-A person who needs quick cash to avoid an embarrassing or life-changing crisis can’t find a loan because of bad credit or financial history.
-The payday loan store will lend a few hundred dollars at 400%, which doesn’t seem that enormous considering the loan term is no more than 2 weeks.
-The customer routinely takes out subsequent payday loans to afford the original loan because of the high interest, eventually spending hundreds or thousands of dollars on a modest initial loan.
People who use payday loans often have no assets worth using as collateral. Payday loans are fast and easy to get with just a pay stub and ID, which makes them attractive to desperate borrowers. Employees are trained to encourage customers to borrow more than they can afford, and often insist the customer take out more and more loans each time they return to make their payment on the old loan.
Car title loans are harder to get approved for. A title loan requires a customer to have a clean car title on a vehicle that is rather new and is worth something, though some companies offer title loans on virtually any vehicle. The more the car is worth, the more a person can borrow. Loans are typically worth $2,000 to $4,000.
Here’s what a typical car title loan would go like:
-The same customer who needs quick cash can’t get a loan from a bank, but has a car free of liens and worth a decent amount.
-The customer uses the car as collateral.
-The title loan company lends a few thousand dollars with a loan ranging from 90% – 400%.
Unlike payday loans, car title loans have a deadline – either when the loan is paid off, or when the company repossesses the car. Still, many car title loan companies lend to anyone who walks in the door.
This opened up an opportunity for Max Cash Title Loans to let borrowers have reputable, trustworthy title lenders compete for their business. Max Cash will deny a customer if the vehicle doesn’t qualify, or if the customer doesn’t have the means to pay back the loan. Max Cash also refuses to do business with title loan companies who charge obscene interest rates.
Car title loans aren’t for everyone, and it’s easy to fall into a slippery slope of debt if they’re not managed properly. Never borrow more than you can afford, and read and understand all the terms and conditions of your title loan or other bad credit loan before signing. If you feel uncertain, ask the loan agent. A reputable company will help explain all the details involved in getting a title loan. If your loan agent is hiding something or rushing through jargon like a prepared speech, run.
Car title loans should be a last resort. Max Cash Title Loans helps ideal loan applicants connect with reputable lenders who work for the borrower, and never the other way around.
**This article is featured in The Yakezie Carnival: Goals Edition**
