Like a lot of other Americans, you’ve struggled with your finances over the last few years. It seems like the bills keep getting bigger, and your resources keep getting smaller.
The only real thing you have of value that you own outright is your car or truck. Should you consider a title loan?
Title loans are almost always a bad idea
Title loans may be legal in Alabama, but they’re not in many other states – for good reason. Title loan companies prey on people who are desperate for an emergency influx of cash and are scrambling for whatever resources they can find.
If you can’t repay your loan within 30 days, the lender has the right to repossess your vehicle and sell it at auction – and the bad news doesn’t stop there. In many states, a title lender who takes that step has to return any excess cash from the sale to the debtor, but they don’t in Alabama.
That means if you borrow $500 on your car’s title and can’t pay it back in full, the lender could repossess it, sell it for $5,000 and keep every dime.
In other words, a lot of title companies make their loans pretty much betting that you’re going to eventually run into a situation where you can’t pay the money back in time. With the used car market being so lucrative right now, they won’t show any mercy.
If your bills have spiraled out of control and you can’t keep up with your daily needs and still pay the credit cards, the hospital bills and bank loans you already have, don’t compound your problems with a title loan. Learn more about your bankruptcy options, instead.