The Dangerous Truth About Bad Credit Auto Title Loans

If you have a free and clear car, but need cash fast, you might find yourself turning to a title loan. It could be the first step down a slippery slope – one you should avoid. Here we discuss how dangerous these loans are and why.

How Securities Lending Works

Auto title loans are a type of secured loan that uses the title of your vehicle as collateral. This means that if you fail to repay the loan as agreed, the lender has the right to repossess your car. These loans typically range between $100 and $1,000, and you must repay them either within 30 days in one installment or in installments, usually with renewals ranging from three to six months.

According to a 2016 Consumer Finance Protection Bureau study, one in five borrowers have their vehicle repossessed as a result of these loans. Also, more often than not, borrowers cannot afford to repay their loans in one installment, so they end up renewing their loan seven or more times in a row, leaving them trapped in a cycle of debt that can last. the longest. a year or more.

Predatory loans

Automotive title loans, as well as payday loans and pawnbrokers, are generally considered predatory types of lending. Due to the incredibly high interest rates that come with title loans – an average APR on an auto title loan is 300% – people often struggle to pay off their loan in full on time.

With a typical interest rate of 25% per month, a $1,000 loan costs you $1,250 to repay. When a consumer cannot meet this payment within 30 days, lenders usually allow you to “roll over” your loan. This is where people get trapped in the cycle of debt. If you pay $250 and renew your original loan amount, which added fees and interest, you still owe $1,250 or more in 30 days.

There are other factors that make these loans unsafe, such as add-ons, which can increase the cost. Add-ons like roadside assistance, credit report fees, and origination fees not only increase the cost of a title loan, but may be required instead of optional. Knowing this, if you absolutely must obtain a title loan, it is a very good idea to shop around before signing any documents.

Car title lenders are required by the Truth in Lending Act to give you the full loan terms in writing. You should also make sure you know your credit score and what’s on your credit reports, and have comprehensive auto insurance before you sign up for an auto title loan.

Before getting an auto title loan for bad credit…

You want to make sure that you consider all of your options before considering a title loan. Not only can your vehicle be repossessed, but there are also a number of other consequences.

For example, your car insurance company may decide to pay the lien holder directly if you are involved in an accident and your car is deemed a total loss. In some states, title lending companies are required to pay you the difference between the value of the vehicle and the loan balance. But, in other states, they are allowed to retain full payment from your insurance company.

Plus, since you’re giving your title as collateral, if anything happens to your car, like theft or a total, you won’t be able to be financed for a replacement until you pay off your title loan – especially if have you bad credit.

Before you sign on the dotted line for a high-interest car loan, consider these alternatives if you have bad credit:

  • Contact your creditors to tell them about your situation and see if they can work with you
  • Ask friends or family members for money to help you
  • Take out a small personal loan from a credit union or a bank
  • Learn about organizations that help with living expenses
  • Consider a cash advance on a credit card or ask your employer
  • Borrow from your 401(k) retirement account

As you can see, there are other options to consider. However, some of them also carry higher than average interest rates, such as credit card cash advances. Other options, such as borrowing from your retirement account or 401(k), should be done with extreme caution and consideration.

As we see

You should always be aware of all the options available to you if you need financial assistance. But, you also need to be careful because not all lender options are as good as they seem. Here has Auto Express Creditwe recommend that you always do your research before embarking on any type of auto loan, especially an auto title loan.

Lime says his scooter and bike company are carbon neutral

Lime, the electric scooter and bicycle company, is going “lime green” by becoming a carbon neutral company.


Lime just dropped serious electric scooter drama

On Tuesday, Lime announced a partnership with NativeEnergy that will allow it to purchase renewable energy credits to recharge its fleet. Since people charge most scooters at home, Lime cannot fully control the company‘s energy use.

Nonetheless, Lime will use renewable energy purchased from local utilities and NativeEnergy renewable energy projects to charge bikes and scooters.

Lime will also purchase carbon offsets to balance emissions from its operations and management fleet, such as trucks and other vehicles that will repair and replace damaged bikes and scooters. The company also said it wants to make its offices more energy efficient and is exploring on-site solar power as an alternative energy source.

As with electric cars, Lime’s scooters aren’t necessarily powered by clean energy just because the vehicles don’t burn fossil fuels. As noted in American scientist, “it all depends on where the electricity comes from.”

Scooter competitor Bird has been touting the green side of scooters since its inception, claiming that electric rides do not pollute or contribute to traffic. Marking his first birthday last month, Bird said his runners saved 12.7 million pounds in CO2 emissions. But that doesn’t take into account the source of electricity powering his scooters.

On the Last Earth Day, Lyft announced that its rideshare service was carbon neutral. Like Lime, Lyft buys carbon offsets, which is not the same as removing carbon emissions from its vehicles.

Yet in the wake of a terrifying new UN report on climate change, at least these companies are taking small steps towards a more sustainable future.

Related video: How electric vehicles can store renewable energy to power the cities of the future