Title Loans – A Good Way To Lose Your Car
November 3, 2022
You have a clear title to your car, truck or motorcycle and you need money.
Title Loan companies will gladly lend you money for a short term loan.
But, there is a catch and a big one.
The interest rate is high: anywhere from over 100% to 300%.
The loan amount can anywhere from 25% to 50% of the value of your vehicle. The average is about 25%.
You give them an extra copy of your key: at your expense.
The average cost for a short term loan is runs $80 to $115 for every $500 you borrow.
What if you can’t pay it back right away?
The original balance of a $1,500 quickly jumps to $2,700 or $3,000. And, it doesn’t stop there.
Maybe you refinance with them. The balance keeps jumping up.
If you can’t repay the Title Loan Company can and will grab your car and sell it at auction.
If you are deep in debt to a Title Loan Company what can you do? FILE CHAPTER 13!
- If they have repossessed your car we can get it back when filing Chapter 13;
- When you file Chapter 13 you can keep your car and repay the loan over a period of 3 to 5 year. And, with only a small or no interest rate.
- If you owe more than car’s value you can “cram them down.” For example you $10,000 but the car is only worth $4,500. You pay the $4,500 and the balance of $5,500 only about $550.
You probably have other debts. Credit card bills and the like can also be repaid for a fraction of what you owe. Most of clients repay about 10% of what they owe.
When you lose your car to a Title Loan Company the interest keeps climbing. A Chapter 7 can “wipe out” your debt along with other debts, like credit cards.
Disclaimer: Blogs on legal matters are for information purposes only and is not to be construed as legal advice.
For more information on Title Loans, call today.