Title Loans are an important source of funds for many
- febrero 8, 2022
- same day payday loan
- Posted by Victoriaocasion
- Comentarios desactivados en Title Loans are an important source of funds for many
Title Loans do have a negative stigma. There are plenty of articles detailing the evils of title loans. It is important to point out that many of these articles are written by credit card affiliates.
In fact, there is often an advertiser disclaimer at the beginning of the article claiming that they are compensated by credit card companies. Most â€śTitle Loan Alternativeâ€ť articles have a Credit Card cash advance as one of the main alternatives.
It is no surprise that credit car affiliates do their part to steer title loan customers to their advertisers in an attempt to generate business.
With that said, title loans are high interest loans. They are for a very specific purpose and can cause financial problems when misused.
Additionally, some, not all, title lenders have behaved unethically in the past. Title Loans did not earn a negative stigma because they are all great; some have caused a significant amount of negative consequences for many borrowers.
We recently published a brief article about title loan myths, and will go a step further in this article to discuss why they have a negative stigma, and show that it is the particular Title Lenders, not the loan itself, that has earned the negative stigma.
As with all other loans, title loans have pros and cons associated with them. For some people they are a tremendous help, and for others they become an unmanageable burden. It all depends on the specific situation, and perhaps, more importantly, the loan terms.
For many of the population who do not have readily available access to credit, or a significant amount of money saved, title loans are an important source of funds when they need it most.
Many title loan customers do not have access to other sources of funds. It is very easy to say â€śget a credit card cash advanceâ€ť as an alternative to a title loan.
This, however, requires both available credit and a credit card that will allow a cash advance for the amount needed. Many cards limit the cash advance amount to a fraction of the credit line.
This assumes the borrower has available credit to begin with. In most cases this is simply not an option for many title loan customers. So, what next? For many a title loan is next.
Title Loans â€“ Why the negative Stigma?
The answer to this is quite simple, yet a bit depressing as well. Most people looking for a title loan have no other option and are in a situation where they need cash immediately.
Many times it is for an emergency, sometimes a loved ones medical or legal bill, and scrutinizing a loan agreement is the last thing on their mind. They want to solve their immediately problem, and will figure out the costs later.
This is human nature. So, we have a GA payday loans borrower in desperate need of funds quickly, with no other option, under tremendous emotional stress. Enter the predatory lender.
The Perfect Opportunity for Predatory Lenders
A borrower in desperate need of funds quickly, with no other option, under tremendous emotional stress is the perfect opportunity for a predatory lender.
This is how many title lenders built their businesses. It is also how title loans gained the negative stigma they carry today. Predatory lenders saw an opportunity to exploit emotionally and financially distraught individuals with no other option, and id so for decades with little or no repercussion. Sadly, many continue to today.
Most of these customers sign loan agreements without reading and fully understanding them, and end up paying an unreasonable amount of interest and fees.