When working to handle a tight financial spot, individuals may consider options that may hurt them in the long run. Certain decisions, such as to pawn an asset or take out another type of loan, may seem like an easy way to get money quickly. However, interest rates on such loans could result in a Tennessee resident finding him- or herself in a worse debt situation, and he or she could be at risk of car repossession.
It was recently reported that many individuals are considering the option of getting a car title loan a beneficial one. This option allows parties to take out a loan against their car title in order to receive various amounts of money. However, these loans can also come with considerable interest rates varying from 80 percent interest to, in some cases, 500 percent interest.
As a result of these excessive interest rates, individuals who thought they were easily getting quick cash are now finding themselves with substantial debt. Because the loan was taken out by signing over the title of their car, individuals could potentially lose their vehicle if they are unable to pay back the loan along with the interest is has accrued. Having a car repossessed can lead to an individual facing additional hardships.
Though individuals who are having a hard time financially may feel desperate, it is important to understand that following through with quick-money options may not benefit the situation. A title loan could lead to car repossession and even further debt problems. Therefore, Tennessee residents may want to consider bankruptcy options that could potentially help them get a fresh start with their finances and possibly stop repossession.
Source: deseretnews.com, “A new boom of auto title loans leaves people in deeper debt“, Deborah Sutton, Jan. 4, 2015