There are a lot of people who are thinking about getting car title loans but sometimes end up getting traditional loans. The reason behind this can be the common myths about car title loans.
Having financial issues is common and can happen to anyone. But brushing off the idea of getting title loans can count as bad decision-making.
Title loans are way faster than traditional loans. In title loans, you have a good chance of getting a loan amount not based on your car equity rather than your credit history or credit score. This makes things simple for you and allows you to get rid of your financial issues.
Here are some of the Myths about Car Title Loans
- You need to leave your car to the lender when you get the loan
This is not true. This is an old practice that was common at a pawn shop where you needed to hand over anything for purchase. But with modern online title loan providers or lenders, do not hold your car or vehicle after funding the title loan.
You can keep driving your car or vehicle while you are repaying the borrowed amount. However, ensure that you are in contact with a reliable broker like the TFC Title Loans.
- You will get into a trap of paying the huge interest amount
This is true that Title Loans is known to have high APRs, but this does not come as a surprise to any educated borrower. When you are getting a title loan, the terms of the title loan agreement, include the rate of interest and repayment information. We are mentioned in the contract that you need to acknowledge. Ultimately, you can end up in this trap of paying huge interest amounts if you are unable to repay the borrowed money. Try to treat title loans as short-term solutions.
- You cannot get title loans with a bad credit score or no credit history
This is the biggest myth that a lot of people believe in. But the lenders are only interested in your Collateral which you can offer in the form of your car or vehicle. If you have a high-equity vehicle, then you can get a high loan. In case you do not pay back the borrowed money, then the lender will repossess your car. But the bottom line is that you are still eligible to apply for title loans if you have a bad credit score or no credit history.
- If you skip a single payment, you can lose your vehicle
This myth is very dramatic and not true. Same-day title loan companies would not ever get any business if they are so rigid and aggressive with repossession. TFC Title Loans allow you to enjoy the benefit of refinancing if you are unable to pay the loan on time. This can offer some flexibility.
Frequently Asked Questions About Myths About Title Loans
- Are title loans only for people with bad credit? Title loans are not exclusively for individuals with bad credit. While they can be accessible to those with less-than-perfect credit histories, they are also used by people who need quick access to cash, regardless of their credit score.
- Do title loans always lead to vehicle repossession? Contrary to common belief, not all title loans end in vehicle repossession. Repossession occurs when borrowers default on their loan payments. Responsible borrowing and timely repayments can help borrowers avoid repossession.
- Are title loans illegal? Title loans are legal in many states across the United States, although regulations and terms can vary widely. It’s essential for borrowers to research and understand local laws and regulations regarding title loans.
Quote from Daniel Joelson, Consumer Finance Expert: “Title loans often carry misconceptions, but they can be a viable option for those needing short-term financial solutions. It’s crucial for borrowers to separate myths from facts and carefully evaluate their financial situation before taking on any loan.”
Conclusion About Title Loan Myths
Believing in myths about title loans can stop you from enjoying the best experience of getting a loan. However, try to maintain good communication with your TFC Title Loans broker if you are facing any issues.
