Friday, October 31, 2014

Car Title Loans Require Responsible Lenders And Borrowers

Car title loans are notoriously known for targeting low income customers with the ulterior motive behind the loans being to their vehicle away. As true as some would say this is, the whole idea sounds a bit exaggerated. People who fall into the desperate need for quick cash tend to be those who are considered low income, but not always. If their credit is poor and income does not support their expenses, then a car title loan is an option available for those who own the title to their car.

Is the car title company targeting these customers in order to sabotage their finances or are they offering one other option to help. High interest rates for a short term loan offsets the risk involved in lending money to those with poor credit. These loans work well for responsible borrowers. Someone who uses their investment to help themselves out of a financial jam knowing that the payoff is just around the corner and there is a payoff strategy in place. The lender does not hold the vehicle, but allows the borrower to keep possession of it. There is risk involved with that action. What happens if the car gets damaged during the term of the loan? What happens if the car gets stolen? There are risks involved with lending money to someone with bad credit history and little income. There are additional hassles and multiple costs to repossessing a car which doesn't support the idea that the vehicle is the targeted prize the ultimate goal.

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