Introduction
The world is currently experiencing a great inflation like never before. The high cost of living has rendered many jobless due to the downsizing of staff in large organizations. For most people, alternative income translates to entrepreneurship. Some are able to finance their enterprises through their savings or other financial investments. Title loans are gaining popularity as alternative sources of finance.
History
Title loans refer to credit forwarded to persons with a guarantee of repayment. The guarantee of repayment is in form of security against which one receives credit. Those seeking for cash advances offer their vehicles to serve as security. In the event that one is unable to repay the cash given within a specified period, the car serves as sufficient recompense. Persons seeking this kind of cash advance are required to present their car's log book to proof legitimate ownership of the vehicle.
There are certain procedures involving securing title loans. The car has to be valued. One's automotive usually costs half its buying price if considered for resale. One's credit history is usually not important in this kind of financial transaction. All that matters is the condition of the car and the proof of legitimate ownership.
Features
People who are experiencing serious financial difficulties are usually the ones known to seek after title loans. There are numerous advantages associated with these types of cash advances. One can get relief from a very precarious situation. The transaction is quick since there are no long procedures involved in the process. Once the collateral has been approved the money is granted.
One major disadvantage with title loans is the loss of one's asset. Retrieval of the amount owed comes from selling one's vehicle in case they fail to pay up in time. These cash advances also come with high interest rates. Moreover, this cash advances are short term and therefore they do not take long before expiring.
Tips and Comments
There is a certain saying that states that without risk there is no reward. However, some risks are not worth the reward. Some basic considerations need to be factored before seeking title loans. One should determine whether they have exhausted all other sources of finance such as advances from relatives and friends, sale of valuable assets, sale of shares, securing advances against one's pay slip and so on. It is also essential for one to weigh the risks against the rewards.
Title loans can serve as life savers during emergencies. This is why many people who experience financial dilemmas usually resort to such kind of cash advance. However, this form of credit could easily devastate those who seek after them. They are not only costly in terms of high interest rates; they also offer a short window of repayment. It is also of utmost importance for individuals to be cautious when making decisions regarding securing cash advances. Many fraudsters go around lending money only to end up with one's automotives. It is imperative that such transactions include the presence of legal counsel to avoid getting in the cross hairs of the law.
