Business World

Getting the Facts on Car Title Loans

Red sign of title loans Despite having helped so many car owners, the title loan industry remains rife with myths. It’s one of those financial industries that, until now, a lot of people tend to stereotype, what with all the misconceptions surrounding it.

Car title loans, when used properly and wisely, can actually serve as a useful tool in times of serious financial difficulties. So before you completely disregard them, it’s time that you straighten out these misunderstandings.

You’d have to surrender your car to secure a loan

This is arguably the most common misconception many inexperienced consumers direct towards these loans. This isn’t true.

You don’t have to give your car up nor will the lender ask you to. In other words, you can keep using and driving your automobile even while you’re still paying for what you owe. The key phrase word here is “paying,” which means, as long as you stay true on your word of paying back what you owe on time, you get to keep your vehicle.

Lenders would rather have their borrowers default

Another notion about auto title loans is that lenders would rather have their clients default on their loan so they can take possession of the vehicle. Although they can take your car when you don’t pay them back the money you owe, don’t think they’ll make a lot of profit off of it.

Why? Simply because the costs associated in vehicle claiming are much greater than the popular belief. From valuing services to legal fees, they would have to spend a lot of money before they can recoup their losses. These procedures also consume a lot of their time.

You have to have stellar credit to qualify

One of the main reasons’ vehicle title loan lenders have stayed in business despite all these myths is because people still rely on their help, which they extend even to those with bad credit.

It all boils down to your choice in a title loan lender. As long as you choose wisely and you practice proper borrowing habits, then you don’t have to worry about losing your car.