Car title loans are somewhat similar to secured loans, in the aspect that they both require some sort of collateral to be put up. With a car title loan, however, a vehicle needs to be offered up as collateral. The lenders require the borrower to provide certification that the car title is in fact theirs.
Car title loans are usually intended for the short term. While the borrower can have up to five years or so to pay back a regular secured loan, they're required to pay back on the car title loan within just a few months. Unfortunately, many title loan lenders charge outrageous fees and interests, making it nearly impossible at times for the lender to pay the loan back. Because of such behavior, there are a lot of laws in place for title loans, which vary from state to state.
In places such as Nashville, TN for instance, some lenders charge much more than the 22% allowed per month that's required by Tennessee law. That 22% is 264% APR. Over one quarter of Tennessee title lenders also reportedly charge illegal fees on top of the high rates.
While there is some illegal activity going on with some title loan lenders in Tennessee, there are many honest lenders as well. There are approximately 900 title loan locations throughout the state, so there are obviously some honest lenders.
Other states that have many title loan locations include Alabama and Missouri. According to regulators, there are 997 licensed locations in Alabama and 250 in Missouri! Clearly, there are plenty to choose from.
If you're interested in a loan but don't think you'd qualify for a secured or unsecured bank loan, then you can check with your state laws and regulations to find out information regarding car title loans. Make sure you read reviews online first, in order to make sure that you know which title loan lenders are trustworthy.
Thanks To : Finance Degree Refinance Interest Rate
0 comments:
Post a Comment