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If your business is in a sticky situation and you need money as soon as possible, taking out an auto title loan might seem like a good option. As with most things in life, however, title loans come with both pros and cons.
Before making a rushed decision and doing something you’re going to regret later, it’s best to just stop and think everything through. Looking at all of the options beforehand is the best thing you can do. To that end, we’ve got some alternatives to auto title loans you should look at first.
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1. Banks and Credit Unions
More banks are beginning to offer customers short-term loans to replace so-called predatory loans. If you’re considering this option we strongly suggest you go to a local bank instead of one of the well-established big banks. Most of these will immediately reject your application.
Although not as popular, credit unions are a great alternative as well. They’re essentially customer-owned institutions. Therefore, in all likelihood, the credit union will approve your loan request.
2. Personal Loans
A personal loan doesn’t require collateral (for instance your car). Therefore, they’re much safer in terms of risking your property. What’s more, you can apply for a personal loan at credit unions, banks, and even online lenders.
These days, online lenders have plenty of investors who have plenty of money to lend. However, getting a personal loan is a little more difficult than getting a title loan. That’s because lenders asses your credit score. They also look at the amount of monthly income you have available, since they want to be sure you’ll be able to pay off the loan.
That said, personal loans don’t require an immaculate credit score. Further, you can often get approved for one with just a steady income.
3. Credit Card Promotions
Although it’s about as risky as a title loan, you can get on your feet relatively quickly with a one-time credit card promotion loan. This option works best when you use a promotional low interest rate. So make sure to do your research and look around.
Our top tip would be not to get carried away. Plus, always monitor the fees. If worse comes to worst, you want to have an exit strategy and a way to pay off the loan.
4. A Cosigner
This option requires someone who trusts you and can vouch for you. Most loans which include a cosigner get approved. However, finding someone who understands the risks and accepts them isn’t easy. That’s because cosigners get the worst of both worlds. They don’t get any loan money, and they ultimately have to pay the loan off if you can’t keep up with the payments.
Check out Our Suggestions Before You Take a Title Loan
A title loan is still a viable option. But do look over the alternatives we mention here before you do. If you still feel like a title loan is right for you, make sure you do your homework. The interest and fees associated with title loans can be quite high.