Car title loans: An industry full of myths
It’s proving to be one of the most helpful sources of finance for a lot of people, but at the same time the car title loans industry is clouded at best. It’s an industry which tends to attract headlines and misconceptions – many of which paint it in a completely inaccurate light.
Particularly with the emergence of online car title loans, the situation has become even more complex. It’s for this reason that we have scoured the industry and pulled out some of the most common myths that exist, as we look at them in detail through the course of this page.
Myth #1 – You need to give your car up to take advantage of one of these loans
We’ll start with one of the most ridiculous misconceptions of the lot, but one which probably happens to be one of the most common as well.
A lot of people are under the impression that you have to give up your vehicle when you get your car title loan – so you are effectively without it for the duration.
Well, let’s put an end to this thinking. You will always keep your car, provided you keep up with the monthly repayments. The point of one of these loans is almost lost if you were to give it up; it would probably hinder your work, and you’d be in an even worse financial predicament.
Myth #2 – Lenders are desperately trying to claim your vehicle
Again, this is a common one; most people think lenders are the complete “bad guys.” Sure, they’re in this business to make a profit, but don’t for a moment think that they’d rather you default so they claim your vehicle.
The costs involved in claiming a vehicle are much higher than most of us realize, and it’s much more efficient for them to receive regular repayments. Ultimately, they will try and help you if you do get into difficulties – the alternative is far too expensive for them and is often left as a last resort.
Myth #4 – You need good credit to obtain one
One of the big advantages of these loans is that you don’t need a great credit rating to take one out. Little else needs to be said about this point apart from due to the fact your vehicle is acting as collateral, it’s a completely false story. The vehicle acts as protection for lenders and this eases the lending restrictions significantly.
Myth #3 – Car title loans are given to anyone
At the same time, following on from the last point, another misconception that absolutely anyone can obtain this type of loan. True, the rules are much more relaxed, but you will still have to satisfy certain terms and the market is still regulated. Like with any form of finance, there is always a degree of caution and you will still have to prove that your car title loan is going to be an affordable payment for you.
So if you need a little business capital and are thinking about vehicle title loans, now you have a bit more information to help you find your way.