September 8, 2018
Title loans can get a bad rap for no reason. Critics of title loans say that APR rates are too high, risks are too great, and the payoff time is too quick for it to be worth it. But these risks exist with all types of money lending services, including credit cards and bank loans. What credit cards and bank loans don’t come with are personalized service and face-to-face meetings with your lenders. If you are offered a loan or credit card in-person in a banking institution, it is a one-and-done type deal. Car title loans are excellent opportunities for those in need of quick cash to work with a local lender who gets to know you as a person and continues the lender-client relationship for an extended time. That way, if you ever need to take out a title loan again in the future, you will be able to do so easily.
Here are some ways that car title loans can help you if you need a little extra cash and might not have other ways to obtain it.
Getting cash without credit or with bad credit
Those who have bad credit know that it is very hard to obtain a loan or credit card if they have poor scores or high credit card balances. But paying off high balances in a manner that indicates “creditworthiness” can take years, even if you are paying all your bills on time. In fact, the average American is in just under $5,000 worth of debt, and it can take 10 years to pay that debt off. That makes applying for loans with a good credit score bleak. But people with no credit are not better off—even if you have no credit and make plenty of money to live comfortably, the bank is still likely to deny you a loan. The reason? They need collateral to ensure that you will pay them back.
With title loans, your car is your collateral. Title loan providers don’t need to dive into your personal credit history to assess your worthiness. Not only does this save time, but it ensures that those with poor or no credit can obtain loans using their assets rather than a made-up symbol of your financial health.
Getting cash during a medical emergency
Then, there’s the matter of emergencies. Emergencies happen right after you’ve paid all your bills for the month or after you’ve used a little extra money to splurge on yourself. They happen at the best and worst of times, and this is most likely why fewer than 40% of Americans have enough money in savings to pay for a medical emergency of $1,000 or more. This means that in the event of an ambulance ride, most Americans are only able to for the ride to the costly emergency room visit. And this just counts for medical emergencies, neglecting things like car emergencies, deaths in the family, and housing emergencies that can total much more than $1,000.
And applying for a bank loan takes time, which often does not leave the borrower the room that they need to make timely payments. Title loans can be acquired in much less time than a bank loan, and offer flexible solutions when emergencies happen.
Planning for future events
From the purchase of the ring to the honeymoon spent in a tropical location, weddings are often one of the number one causes of financial stress in young Americans. In fact, the average cost of an American wedding totals out at a little more than $25,000. Although many couples end up spending much less than that, there is always an associated cost with getting married, even if it means just purchasing the marriage license and paying to get your own identification documents changed. Many young couples do not have the money up front to afford a wedding ceremony, and this is causing the rate of married couples to continue steadily declining. When parents do not help with weddings, banks will not give out loans, and you are working hard enough as it is to make ends meet, having a beautiful wedding ceremony seems out of reach.
But if you have a car and a little extra monetary wiggle room, taking out a title lien with a car title loan provider can give a young couple a little extra money to make a ceremony happen in a way worthy of showcasing their dedication. Title loans are also great for planning quinceaneras, bar and bat mitzvahs, retirement parties, and other events that take a little extra to make extra special.
Making a mid-sized purchase when the bank has denied you a loan
Believe it or not, banks can deny you a loan based on many factors. Most believe that good credit is the best qualifier for bank loans, but even those with good credit are denied loans on a regular basis. In an article about mortgages, a whopping 32% of loan applicants with excellent credit scores were denied access to a mortgage for other reasons. One of the biggest reasons? Having too many prior loans. This makes obtaining a loan as a college student or someone still paying off their college loans nearly impossible. Banks don’t see the reason for private loans, they just see that you have them taken out and get suspicious at the number you have.
With car title loans, the lender does not consider the number of loans you have out, your credit score, or other factors relating to your financial history. Instead, they use your vehicle as collateral. If you are someone with an excellent credit score but other loans or an alternative job (such as an independent contracting job), this type of loan is very beneficial.
If you live in Memphis or the surrounding area and are seeking help to fund a major event in your life, consider working with Mid-South Title Loans. They can help you get the money you need in a timely and efficient matter. For more information, contact us, or come to one of our Memphis, Tennessee locations.