3 Ways You’re Taking Title Loans the Wrong Way

Too many Utahns, especially those with bad credit, think that title loans is a godsend. This financial product offers the most convenient way to secure instant cash without even looking at your credit history. It forgoes the tons of paperwork when other types of loan require demanding documentation. In less than 30 minutes, you can leave the money you need and drive home with the very vehicle you use as collateral. A title loan’s utility is attractive in many ways, but it can be used in the wrong way. That’s where the series of problems begin. Unlike informed title borrowers, you might get not what you bargained for. For starters, never use a title loan of any vehicle for these reasons:

Improving Your Credit

Utah Money Center and other car title loan providers in Taylorsville, Provo, and Sandy noted that title loans don’t have anything to do with your credit. The establishment’s staff may run a credit check under your name, but it’s only done to avoid identity theft. It’s a secured loan, which means you may lose your vehicle should you default — but that wouldn’t appear on your credit history. If you’re primary purpose of apply for this type of loan is to repair your credit, go for unsecured loans instead.

Borrowing Money to Save Money

Title loan providers discriminate nobody, which is why you could apply irrespective of your credit rating. This type of loan, however, is usually catered to people shut out of the mainstream banking system. This is why the interest in title loans are a bit higher than other financial products. Many lenders offer all sorts of rewards, but you may be better off elsewhere if you want to save in interest.

Tapping into the Entire Equity of Your Vehicle

If you’re hoping to receive exactly what your vehicle is worth, it’s not going to happen. While offers differ per lender, you could usually get about 50% to 75% of your vehicle’s value. A 100% is quite a stretch, however. Like other financial products, a title loan serves a unique market need. If you’re going to use it right, you could make the most out of it.