What To Know Before Taking Austin Car Title Loans
Applying for Austin car title loans is a popular means of getting finance quickly in case of an unforeseen event. Recently, there have been more regulations governing the companies providing this service because of mishaps that put unsuspecting clients into debt. Thus a few tips may come in handy if you are looking for one of these to cover you.
These advances work in a very simple way. The borrower in need goes to the car title company and asks for a loan. If the vehicle is clear and worth the loan amount asked for, he signs an agreement giving the lender ownership in his car until he pays back the loan with interest. If he defaults on the payment, his car is repossessed and auctioned off.
Sadly though, car financing and the companies providing them do not have the best name. This is because the companies that offered the loans usually did so by giving the desperate borrowers very bad terms. Interest rates of between 300 to 400 percent were not unheard of.
Some companies offer credit counseling facilities. This is the company you should seek when in need of a loan. This facility is beneficial because it gives people the capacity to learn how to manage their finances instead of being dependent on the loans. Thus the borrowers are taught a skill that may help them out of debt.
In a similar way when looking for a loan, the company one goes for should ideally be one that has a conscience about the amount of money people should borrow. It should place caps on what kind of advances to make. The company should actively refuse to add on the amount borrowed by the borrowers.
Why this criterion is vital is simple. Nobody rich will look for a way to pawn their car. Most of the clients will be in economic need. Imposing high interest rates and allowing them to borrow excess amounts will only make their situation worse.
This cap on borrowing excess amounts is most pertinent because these loans run for a very short period of 30 days only. If you cannot pay back, which is quite feasible, and then the lender allows you to carry over the debt with added interest to the next month.
These are the red flags to watch out for in any company that provides Austin car title loans. In a nutshell, they should have limits and provide credit counseling. Anyone following these guidelines will be sure to keep their head above the vicious waters of debt.
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June 17 2011 07:39 pm | Uncategorized