With some of the biggest names in business claiming bankruptcy and laying off thousands of workers, lay offs are becoming a reality in this financial downturn. Losing your job is one possible outcome of your company’s efforts to downsize and cut costs in these stressful times. Although it’s not something you can predict, being laid off can have a significant impact on your income and lifestyle.
If you’re concerned about preserving your home and lifestyle you will have to come up with a way to stay current with your financial responsibilities in this downturn. If you have bad credit, it will be even more difficult to qualify for a conventional loan.
If you have a clear car title, however, you can use that as collateral for cash car title loans, regardless of your credit score. When used responsibly, a bad-credit loan such as a car title loan, can provide the cushion needed to pay the bills to and hold you over until you find a new job.
One of the biggest fallout’s of losing your job is that you have to draw from your savings or find other income to manage your monthly household expenses and bills. If you were living from paycheck to paycheck before the lay off, you know that just one month without work can be devastating.
As those bills pile up, you could fall seriously behind on repaying your household debts without a regular income to rely on. Missing important payments, like your mortgage, can lead to foreclosure and cause your credit score to plummet. Going through a medical or other crisis at this time could stretch your finances to the limit.
While many cash car title loans are short-term, some lenders will work with you to offer flexible payments and create a repayment schedule that you can afford. You should remember, however, that because these are subprime loans, they will cost you more in interest payments than conventional debt instruments.
If you’re not careful about the lender you choose, you could end up paying much more in interest or balloon payments over the term of the loan. By forcing you to rollover your loan and pay exorbitant interest rates, predatory lenders could trap you in a cycle of debt that will be hard to break out of.
Before you take cash car title loans, always have a plan to repay it. Read the terms of the agreement carefully, especially the section on legal disclosures, to understand the yearly interest rate you will be paying, expressed as the APR.
Also understand what happens after the term is over and what you will be expected to pay and when. If you don’t understand something in the agreement, ask a legal expert to help you clarify it. Understand your rights as a consumer and make sure that the agreement does not prevent you from taking legal action against the lender should your rights be violated.
Defaulting on cash car title loans can devastate your finances and further lower your credit scores. If you manage to repay the car title loan diligently, according to the terms of the agreement, it will be a positive mark on your credit record. You could use this boost to reestablish your credit, so you can borrow a low-interest bank loan and become financially solvent again.