Posts Tagged ‘Borrow money’

You could lose your car if you miss a single payment

If you need to raise a few thousand dollars and you can’t get a regular bank loan, you might be tempted to apply for a car title loan. You put up your vehicle as security, and then just pay back the money over the next few months. There’s no credit check, and you don’t even have to give your bank details. Sounds good, right? Not really, and it could be easy to get an auto title loan, but you must be aware of the risks of borrowing.

Interest rates can be high

In some states, interest on consumer financing products such as auto title loans is capped at 30-36 percent a year. Here, though, lenders often compensate by charging steep fees if you make a late payment, and for issuing loan documents and verifying that you don’t have outstanding loans or liens on the car.

APRs (Annualized Percentage Rates) on title loans can be 300 percent or more. In Illinois, for instance, rates are not regulated and can be up to 700% per year. The interest rates can be manageable, just like with payday loans, if you’re able to pay the loan off within a month or two. However, because car title loans are often worth several thousand dollars, many borrowers find themselves extending their loans many times, and getting deeper and deeper into debt as interest charges pile up.

Watch out for scams

Car title loans are illegal in several states, but there you might be offered a “motor vehicle line of credit” or “sale and leaseback” deal instead. Though they’re similar to car title loans, as they are not permitted you don’t have legal recourse if the lender decides to seize your vehicle even if you have made payments when due.

Even though it’s against the law for any title loan issuer in the United States to charge you a fee when they repossess your car, some will still demand payment. In some cases, borrowers have had to pay cleaning charges, as well as hourly rates for someone to come and pick up their cars, plus mileage and towing fees.

“Pay up or lose your car”

When you pawn your jewelry to raise some cash, you know you have to go back and make regular payments or the pawn shop will confiscate your valuables and sell them. A car title lender can do the same thing with your vehicle. In other words, if you miss just one payment of maybe a couple of hundred dollars, you could lose a vehicle that’s worth many thousands, and you’ll have no way of getting around. That is a large risk to run.

Some lenders will sue instead, and you won’t have to give up the car if you can pay the entire amount owed, along with court costs and legal fees, and that is a challenge if you are already hard up for money. Before signing car title loan paperwork, check the fine print for details on penalties for late or non-payment. Can the car be seized by a loan company if payment is just a day late? Will they hike your interest rate instead? Can they track you down via GPS and disable your engine remotely if they don’t get their money?

Look elsewhere instead

The risk of losing your car to a title lender is so high that, for most people, it’s worth making the effort to borrow from a different source. Think about applying for a payday loan, which doesn’t require you to put up your car as security. You could be eligible for a credit union loan or government assistance. How about having a garage sale or selling some things on eBay?

It’s hard to live without a car, and you might not want to risk yours due to not being able to handle title loan payments.

Borrow money and borrow stress?

If you need to borrow money, better keep an eye on your mental health. Money and mental health are connected to one degree or another, and when your income slows or is strained it has a negative effect, and it can even leave you as a patient without means to get the help you need, meaning you’d have the options of either borrowing money or leaving bills to go to collections unpaid.

Current economic situation and debts

The current economic situation has been putting a lot of stress on people, especially those who have been at the receiving end of job losses and severe cuts in wages.Add a mortgage, foreclosure, or short term loan, and you have a recipe for a war on your mental health.

You wouldn’t get affected if you had insurance to cover the costs, but most people unfortunately don’t, which creates added stress.  Mental health care is not cheap, and not having a job makes you scared of taking out another loan.

Some matters can be handled by you

Most cases of stress involve handling what you need to do to get out of the stressful situation.It’s vital to focus on what you want to acheive, like looking for a job. However, if you keep spendign time and money at the bar or movie theater, your problems will get worse, and it can lead to having to constantly borrow money.

If you take care of everything you can, most of the time, your stress will be diminished. and your mind, healthier. However, if you still need or think you need outside assistance, there are plenty of ways to get care at a cost that you can afford. A lot of mental health care providers have fee structured on a sliding scale, based on financial need.

Stress related to debts

If you find yourself in debt and being harassed by creditors, you need to act fast. This can be really stressful, but you can still get out of it.You have to accept that you have to cut down on spending and repay debt to get free again.  After all, money has gotten you the mental problems.

A debt consolidation may actually help more than a health care provider if your anguish is related to money. For other issues, it still may be a good idea to see a professional.

Do not get into further debts

Make sure that you do not get into further debts of any kind unless you have sorted out your issues.You don’t help yourself by borrowing money to make yourself feel better.You might also be making it worse, and you need to have patience with the money you have and learn to manage things within those boundaries.  Patience and a strong mind is required right now, and thinking otherwise will only keep you from hitting your ultimate goal of being debt free.

Bottom Line

If you still feel lost, start looking for some help online. If you have to borrow money, be very sure of what you’re doing before you do it. You can find a number of counselors who are willing to assist you in a limited way.If you have to visit a helaht care provider, as a patient, without money, be prepared to wait a while. There may be a long waiting list to get assistance.