Title Loans, Easy to Get Personal Loans in Salt Lake City in Demand

An auto title loan, or title loan, is a secured short-term loan that requires the borrower to put up a vehicle he owns as collateral. The borrower allows the lender to put a security interest on the vehicle’s title, which will be lifted as soon as the borrower completes payment of his loan. If the borrower fails, the lender can sell the former’s car to pay for the amount he owes. Despite the risk posed by this type of loan, NBC News columnist Bob Sullivan writes that many people are taking it out, and the number is astounding:

“Desperate consumers who are out of borrowing options are using their automobiles as collateral and paying $3.5 billion a year in interest for the so-called “title loans,” the Center for Responsible Lending said in a report issued this week. The average loan is $950, and borrowers take on average 10 months to repay the loans, meaning they’ll spend $2,140 to borrow the money, the report said. The size of the title loan market is roughly equal to the size of the payday loan market, which has received far more attention from regulators, according to the report. Title loans are only allowed in roughly half of U.S. states, making the size of the market even more surprising, said report author Uriah King.”

One reason why easy to get personal loans in Salt Lake City, like title loans, are popular is that the borrower’s ability to pay—or his credit record—is not taken into account. Unlike banks, which go through a stringent assessment process, title loan lenders don’t even bother checking credit history or employment status. Loan agencies, such as Loans for Less, are not strict with measures normally implemented by banks and payday lenders because of the vehicle collateral, King says, in the article. Agencies say title loan borrowers are more determined to make timely payments since they’ll lose their car—which is often their most prized possession—if they don’t. Title loans are usually the only legal alternative left for people who can’t transact with banks or credit unions due to their low credit scores. Therefore, they are willing to approach companies offering amazingly simple title loans in Utah.. Surprisingly, repossession rates aren’t high, Sullivan writes. What the lenders are saying must be true: borrowers care about their cars enough to make diligent payments. For those who need title loans, lending companies like Loans for Less offer various vehicle loans, at the lowest possible rates. The company also provides personal, signature and installment loans. Title loans do have higher interest rates but can be a huge help to someone who desperately needs cash but has no other options because of poor credit. When used properly and responsibly a title loan can be a huge help to anyone in a tough situation. (Source: Pay $2,140 to borrow $950? That’s how car title loans work, NBC News, March 6, 2014)