Car title loans carry a reputation for “bleeding the poor.” The title lender does not chase after people to apply for loans, but it does offer quick access to emergency cash to those who own their own vehicle. The real fact in the matter is that being low-income is not a viable factor in who needs a loan. There are many different income levels that end up strapping people. It isn’t the dollar amount as much as the management of said income. A major deciding factor in loan qualification has nothing to do with income, but rather or not you own a vehicle.
For starters, since a title loan is a short-term loan, people who need emergency cash for an unexpected cost: medical, auto, home or funeral costs are most often reasons to obtain a loan. When any of these costs go over a few hundred dollars, many people of all income levels may not have the money in the bank to support the bill. Credit cards are often used to pay for these types of emergencies, but if the available balance comes up short, a person will need to solve the financial crunch in another manner. Car title loans tend to be a quick fix for those needing fast money.
Credit scores do not play favors to those with higher incomes. If a person is not able to manage their income proficiently and ends up making payment errors or omissions, getting financial help may prove to be a difficult task. Banks and credit unions will not look favorably towards low credit scores. Title loans will not look at your credit history since their loan will be secured by the pink slip of your car. As comforting as this aspect might be to someone in an emergency situation, the applicant must remember that the short-term loan will need to be paid in 30 days. Since the loan is secured by the vehicle, it makes the payoff a top priority within the budget. For those with poor credit due to current financial difficulties, you will want to seriously consider how this loan will be paid off according to the loan terms and conditions.