There are two reasons some Utahns are reluctant to apply for a title loan: sharks and myths. The fear toward the former is understandable; given the growing number of horror stories you hear, and probably based on experience. However, believing the former is both unfair to honest moneylenders and to yourself.
Applying for a title loan is not like making a pact with the devil. Some lending companies may offer one-sided deals, but others sincerely mean honest business—something favorable to both parties
If you’re in dire need of instant cash, your must first put the following misconceptions to bed to see the real benefits of title loans:
You’ll Surrender Your Car
There’s a reason it’s called a car title loan. According to Utah Money Center, the only collateral needed in this transaction is the title, and you get to keep your car just like nothing happened. Unless you default on your payment, nobody would take your ride from you.
You Can’t Pawn Other Vehicles
Title loans are not limited to just cars. Some lenders now also accept trucks, ATVs, motorcycles, snowmobiles, and other types of vehicles. The company, however, may hold your vehicle until you pay off your loan. But this allows you to borrow a high percentage of your vehicle’s value.
Your Credit Must Be Perfect
Lending companies will run your credit check not because they have a credit score requirement, but to protect title owners against ID theft. There was one case when the owner’s title was stolen and got pawned, it resulted to repossession.
You Get Nothing but a Rip-Off Rate
When you apply for a car title loan in Orem, Provo, or Spanish Folk, you can determine how competitive the interest rate given to you by getting quotes from different lenders. In addition, the fact that you’re providing a collateral makes the loan secure for the company, which can help lower the interest they have to impose. On the contrary, some lenders may even reward you by paying on time in the form of decreasing interest.
A title loan is only risky if you don’t know what you’re doing. Exercising your due diligence and being financially prudent lets you know if you’re dealing with a shark or an upright lender.