An Automobile Title Loan May Not Be Your Best
Option
An automobile title loan is very much like a payday loan. These loans are usually characterized by a short-term period and
have high rates of interest. Lenders who are willing to extend these types
of loans target
individuals who are badly in need of cash.
If you own the title to your car, it would be
very easy for you to borrow money from title loan companies. There is a lot of Detroit money lenders who will let you borrow money with the title to your car serving as
collateral for the loan.
Beware of Balloon
Payments!
What is a balloon payment? In contrast to an amortized loan, a balloon
payment represents the remaining amount you need to pay to settle the whole
loan. Let's suppose you got an auto title loan for $30,000.
If your monthly payments
represent only the interest on the loan amount, then you would still have to pay
$30,000 (principal) at the end of the loan terms.
If you fail to settle this amount,
the lender will
repossess your vehicle and then sell it. Think twice before getting a title loan, or you may
end up losing your car.
Written by: Katrina Marion
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