Car title loans a good thing?
When does it end. It was late and I glanced at a happy sounding ad that was bound to be music to the ears of struggling Americans. If they own their car they can get a loan irrespective of their credit status.
The ad shows a man and his wife leaving an emergency room. “With no insurance we needed cash,” The husband said. “So we took our car title to TitleMax.” An attractive woman in a convertible also says she needs cash now as she is being stopped by police. “TitleMax turned my car title into cash,” an attractive woman said. “My car title was my credit so approval was easy. The ad then speaks about getting the car title loan in 30 minutes.
So what exactly is a car title loan? It is rather simple. If you own your car you were given title to it. You turn over your title to your car till the car title loan is paid off.
So what is the problem with car title loans?
Interest rates from companies that run these can be 250%. And you thought you 19% credit card bill was high. Many require the owner of the car to give the car title loan company a working copy of the keys to the vehicle. Worse of all they can take possession of the car if you are delinquent on the loan. I was unable to find the actual interest rate TitleMax was charging on their website.
A few years ago I wrote about what I considered to be yet another pilfer by lenders. Reverse mortgages can be an encouragement for many to use up an asset that otherwise would have gone to a loved one to progressively build wealth. Instead upon death the home could revert back to the bank.
Consumer Affairs is illustrative. Some of the complaints on that site would bring many to tears.
It is time for us to stop allowing those who can least afford to be pilfered from losing the little they have.