While it is very easy to apply and have your loans approved, auto title loans still disappoint a lot of people. Not because their loans were not allowed but the loan amounts were reduced. Yes, there are certain misconceptions with regards to loanable amount using car title as guarantee of payment. Auto title loan companies can offer financial assistance but it can never give the following:
- False hopes – if you believe that loan companies offering auto title loan can help you solve short term financial crisis, then you are very wrong. It can at some point but it cannot help you get out of the habit of frequently applying for one from time to time. It can give you the easiest way to get emergency money using car title as collateral but loan companies will guaranty that your dreams of owning a new house or updating your car to luxury cars will not be easily realized.
- A lot of money – you cannot fool these loan companies by applying for a huge amount of money and back it up with titles of your assets. You better check how much your assets are worth. The amount of loan to be approved depends on several factors such as resale value of the car, the condition of the automobile, and the age and make of your care. Thus, it can only give you as much depending on the assessed value and other factors. On top of that, even if your car has favourable assessed value, title loan companies will still not give you unreasonable amount of money if your monthly income statement shows that you cannot pay it on time.
- Financial freedom – it can give you temporary solution for you emergency problems but it cannot solve all your financial issues. If you have spending problems, it can only recommend ideas and urge you to seek the assistance of debt consultants but it cannot help with your financial behaviour and spending habits. It cannot impose monetary discipline but they will be prudent when it comes to extending loan services for you and see to it that you are capable of repaying it earlier or on the due date.
- The same amount of loan – there is a thing as risk factor and depreciation. Thus, do not expect to get a similar amount of loan when you apply for the same kind of loan months after repayment of the existing loan using the same auto title. Definitely, the loanable amount will be reduced to factor depreciation, wear and tear of the vehicle, and risk factors based on economy and statistics.
What can you actually conclude based on the four mentioned ideas? Other than the fact that there are some things that auto title loans companies won’t give you, these ideas also indicate that such loan companies actually exercise discipline when offering loan services to borrowers. They do not put both borrowers and their companies at a risky situation where both parties can potentially lose.
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