Title loans are a type of short term financial solution for people who need money in a hurry. Basically, the title deed of a vehicle becomes collateral for the loan, which is generally a high interest loan. In general, they are classed as a last resort option for people with a true emergency.
Are Title Loans Safe?
Vehicle loans have received a fair amount of bad press lately, while they are still increasing in popularity. The bad press is due to the idea that title lenders are nothing short of loan sharks, charging extortionate rates for small amounts. However, as people need money fast and it is increasingly difficult to achieve this through traditional methods, there is often no other option. And the reality is that you can be safe if you know what you are doing.
How to Stay Safe
You should only use car title loans in Orange County if you have a real financial emergency. You must also be completely sure that you are able to repay it on time, and that the company you deal with is reputable. There are literally thousands of lenders to choose from, and not all of these are created equally.
When you look into the practices that these lenders offer, responsibility is the most important thing. You are responsible for paying your loan back on time, but a lender has to be responsible too and only provide you with funds that they know you can afford. Assessing financial capability should be a two way street, in other words.
The ability to pay a loan back is absolutely vital. Most people who apply for title loans have an absolute need for their car, which they would lose if they can’t pay the loan back. This is why they should only be offered an amount that they can reasonably be expected to pay back.
Title loans can be completely safe and even offer a really good solution to those with a financial need. However, you must also know the risks that are involved in it. The biggest risk with this type of loan is that you could lose your car. Because of this very real risk, you must evaluate whether or not your needs will actually be met by this type of loan construction.
You must also only deal with companies that have a good reputation. Spend some time doing your research and find independent third party reviews. Checking out the Better Business Bureau website is also always a good idea, as this will tell you whether there have been any complaints against the company, or whether any federal or state action has been taken against a company as well. You should also compare the market in terms of finding out which lender offers the best possible rate. The APR on these loans is always high, because your loan will only last for around one month, but that doesn’t mean there are no differences between different providers.