If you are in a financial emergency where you need funding and fast, then you may be considering getting an auto title loan.
But perhaps you are hesitating because you have heard people say they can have certain pitfalls. So, you might be wondering how bad are title loans really.
Here, at TFC Title Loans, we can give you all the details about the possible advantages and disadvantages of Car Title Loans as we have been in the alternative lending industry for nearly 25 years.
With all of that experience, we believe it is our responsibility to share all of the knowledge we have gained from that experience with our customers.
We do this because we are strong believers in consumer education and lender transparency. Recently we have been working hard to expand our website to include various resource pages that answer questions and address concerns about Car Title Loans.
This particular resource article will be address the risks and disadvantages of title loans and how we, at TFC, try our best to minimize those risks and maximize the advantages.
All lending options have risks that go along with them. No matter how traditional the loan, there will always be risks associated with them. But, of course, there are some other risks that go along with title loans that are atypical of other lending options. This is because title loans are secured loans rather than unsecured loans, meaning that your approval is based on the collateral trade-in value in your vehicle rather than your credit score.
You can be approved for Car Title Loans regardless of your credit score but that means the lender will be taking on more risk by lending to individuals with sub-prime credit scores. Since the risk is higher there will be higher interest rates on the loans.
Ever since we first opened our doors in 1994, we have helped thousands of customers through their financial worries by providing Car Title Loans at amazingly competitive rates. We have locations all across the states of California, Arizona, and New Mexico. If you would like to learn more about title loans, then keep reading.
Risks of Title Loans
High Interest Rates: Since there is a higher risk for lending to borrowers with a lower credit score, title loans always have higher interest rates to cover that risk. A higher interest rate means that you would end up needing to pay more back than you would need to with other more traditional loans.
Repossession Is Possible: Your car is used as collateral for Car Title Loans which means that if you were to miss payments and default on the loan, repossession is a possibility. Repossession can be avoided if you catch up with your payments or pay off the full balance of the loan.
Short Loan Terms: Many Car Title Loans have shorter loan terms so that you have to pay off your title loan in only a few months and sometimes as little as thirty days. This can make it incredibly difficult to pay off your loan on time.
Unexpected Fees: Late payments can mean fees which build up over time increasing the total amount you will need to pay back. Some lenders even charge prepayment penalties so the borrower has absolutely no chance to minimize their interest acquirement by paying off the loan early.
How TFC Minimizes the Risks
Longer Loan Terms: We tailor each of our customers’ loan terms and payment schedules with longer timelines of 24 to 36 months, making the payments exceedingly more affordable.
No Prepayment Penalties: Here, at TFC Title Loans, we charge absolutely no prepayment penalties whatsoever so you can feel free to pay off your loan as early as you like to avoid the accruement of interest.
Sliding Interest Scale: TFC Title Loans have a title loan product which can minimize the likelihood of higher interest rates called a sliding interest scale which tailors each loans rate to the client’s unique circumstances.
Excellent Customer Service: If you are worried about defaulting or missing payments, all you need to do is give us a call and we can help work out a way for you to succeed in paying off your loan. We want to see you succeed.
How Much Cash Can i Get?
Trading Financial Credit, LLC may act as the broker for the loan and may not be the direct lender. Loan proceeds are intended primarily for personal, family and household purposes. Trading Financial Credit, LLC does not offer or service student loans. California loans are made or arranged pursuant to a California Financing Law License : 603-8192. Arizona: Loans made pursuant to Arizona Department of Financial Institutions.
New Mexico: Loans made pursuant to New Mexico Regulation and Licensing Department Financial Institutions Division Small Loan Company License. Small Loan License 02069
*Credit approval is subject to Trading Financial Credit, LLC credit criteria standards. Actual loan amount, term, and Annual Percentage Rate of the loan that a consumer qualifies for may vary by applicant. Minimum loan amounts vary by state. Consumers need to demonstrate ability to repay the loan.
*Application processes could take five (5) minutes to complete. Upon completion, a conditional approval may be given pending review of documentation. Funding time is based on the time from final approval following receipt and review of all required documents and signing, prior to 5PM PST on a business day.
*Trading Financial Credit, LLC dba TFC Title Loans, Car Title Loans California, Dineromax. If you are using a screen reader and are having problems using this website, please give us a call at
1-844-242-3543 for immediate assistance.