Title loans are a useful tool for people who are strapped for cash. They certainly are risky, since if you fail to make a payment they'll come repo your car. When used responsibly, they can help people get out of a financial pinch quickly and effectively.

The way that an auto title loan works, is that you sign the lease of your car over for a cash loan. You have a set amount of time to pay the loan, plus interest, back (usually 30 days) and you keep your car. If you don't pay back the loan on time, they send the repo man to come and repossess your car.

What You Need For A Car Title Loan

In order to get a car title loan you need a car (duh) that is totally paid off and a copy of the car's title. You will bring this with you to the title loan lender and they will place a value on your car. After determining the value of your car, you will be offered an amount that you can borrow and the terms of paying it back. The terms are usually 30 days with an extremely high interest rate. Title lender play their game outside of the bounds that banks and credit card companies do, so they can charge this extremely high interest rate.

Many times, you will also have to give them a key to your car in case you fail to make payments and default on the loan. Fast cash title loans are not forgiving, and will come and take your car from you. In some states there aren't laws that make the lender pay you the difference of the sale of your car and the amount that you owe them, so you may end up losing big time. One automobile title loan company in Arizona actually makes it mandatory that each car is installed with a GPS tracker so that they can be found for repossession.

When You Shouldn't Get A Title Loan

The obvious time that you shouldn't get a car title loan is if there isn't a way that you'll be able to pay the loan back. You're probably saying, "Yeah dude, I know that already," but many auto title loan lenders make as much money selling their repossessed cars as they do in the interest earned. This tells me that people aren't assessing the risk as much as they should before signing the contract.

If you're serious about getting a title loan, spend a few hours researching their websites to see which one is going to give you the best deal. They aren't really covered by any laws that state how much interest they can charge you, so the rates are going to be very different from one company to the next. This research can save you hundreds or thousands of dollars, or even your car, if you spend the time doing it.

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