Are car title loans a smart way to borrow money? Well, on behalf of your Buick Car Dealer in Canada, we set out to do some research to find out. What we discovered is basically not at all good. “Think of car title loans as payday loans’ bully brother.” Their interest rates are lower than a payday loan, but are still all out of whack and not in your best interest. Usually people who go for these loans are in a bind and need a quick fix. You end up paying way more than you borrowed, though, according to your Buick Car Dealer in Thunder Bay.
“While their interest rates are lower than those of payday loans, which can have APRs upward of 1,000%, car title loans’ interest rates are by no means low. Thirty-six percent APR is generally considered the upper range of ‘affordable.’ The fees and cyclical borrowing associated with car title loans make them even more expensive.” Another problem comes into effect if and when you cannot make good on your payback when promised. If you cannot deliver, you might actually lose your vehicle. As a matter of fact, 20% of those who take out a short-term, one-time payment car title loan will actually lose their car in the process by repossession, this according to information found online in an article on CFPB.
“You’re not just paying an outrageous interest rate — you risk losing your car,” says Liz Weston, a NerdWallet columnist and financial advisor. “The repossession rate on these loans is incredibly high, and people lose their jobs because they can’t get to work.” Isn’t that a kicker? According to all that we read doing research for your Thunder Bay Buick Car Dealer, people really do cut their nose off to spite their face when it comes to these types of loans.