It is a common aspect of modern adult life to deal with various debts and loans, and major life purchases and actions such as getting a home, a new car, or a recreational vehicle nearly always involves taking out a personal loan or visiting loan places or mortgage companies to finance a major life decision. Loans may be had from credit card companies, mortgage companies, or car dealerships that want to help their customers finance a new car. What are some common trends and patterns for loans and borrowing money for modern Americans, and what different types of loans are out there? For example, is it a good idea to get title loans on one’s car? This type of personal loan is an option for any car owner, but knowing what they are getting into is a safe route for any potential borrower before they get a car title loan taken out.
Trends for Debt
Including title loans and other miscellaneous types of loans and debt, the total American debt among consumers is massive, and several industries make up generous shares of it all. Cars are arguably the biggest share of American consumer debt, and there are statistics to back this up. The total debt on vehicle loans is enormous; as of the year 2017, the grand total was $568.6 billion, and in that same year, auto loan debt made up 9.03% of all consumer debt, a significant portion of it all. It is believed that 44% of American adults are paying off debts for their cars, nearly half the population, and the average loan for a new car came out to $31,099. This means that auto loans are the single most common reason adults take out loans today at 31%, while paying bills comes in second at 26%, and borrowing money for personal emergencies ranks third at 21%. A loan can vary in amount form a mere $50 all the way to $200,000, but the average is in fact closer to $7,576. In the middle of all this borrowing and loans, how do title loans factor in? How do they work, and who can take them out?
Title Loans
Getting a car title loan is relatively fast and easy compared to some other loan and money borrowing services, although someone looking to get instant title loans must know exactly what they are getting themselves into, since there are certain risks and downsides to this type of loan. Someone who wants to try finding title loans can search online with queries such as “car title loans Flagstaff AZ”, or they can consult other money lending services to find the names and addresses of local car title loan places. The interested borrower will visit with their car and that car’s title, and go inside and apply for the loan. Such a loan has relatively lax requirements, not even requiring the borrower’s proof of income or credit score in most cases, and the loan my be completed in just half an hour. The loan’s value will be based on a percentage of the car’s value, and the lender will hold onto the car title as collateral, making this a type of secured loan.
The borrower may soon leave with the money, and they will have to pay it back, plus steep APR, within either 30 days or in installments, depending on the type of loan that was taken out, but the borrower can expect very high APR on this, often well over 200% in most cases. Those who do not repay the loan as per the terms of agreement will find their car repossessed, and a fair number of such lenders end up in that situation. It is also an option to renew the loan more than once, although this will incur fees each time, and a borrower who is not careful may find themselves in a cycle oft debt. Statistics show that it is rare for title loans borrowers to borrow only once; they usually renew the loan at least once, and sometimes, a borrower will renew their loan seven or more times. A borrower must know exactly what they are doing before they take out this type of loan, and have all their finances in order beforehand.