Pro-consumer groups are definitely not that fond of title loans in Utah. Much bad press has been released about this type of financing; some say the interest rates are a rip-off, while others believe the loan’s very structure is not designed to help the borrower. Different horror stories circle around the Internet, picturing how lenders are merciless and inconsiderate come collection time.
The reality is, not everything you hear exactly holds true. In most, if not all, cases, moneylenders would explain to you precisely the terms of the loan and the penalties should you default. Those who failed to repay and lost their vehicle may feel victimized, but they actually the eventual consequences of their actions better than anybody.
As further proof to such unfair view, here are other popular misconceptions you might have already heard:
Your Vehicle Is Required as Collateral
This may be accurate for some other types of vehicle, like ATVs, but most moneylenders would let you drive your car throughout the term and only ask to keep the title. This loan is secured, so it’s normal that you have to pawn something before you get the money, however, most title loans are called that way for a reason.
It’s Not Your Last Option
Title loans exist because there’s a population that’s in dire need of cash but shut out from the mainstream banking system and have maxed out their credit cards. More often than not, if you’re considering to apply for a title loan in Taylorsville, Orem, or Sandy, you’ve basically run out of better choices.
You Risk Repossession the Moment You Can’t Pay
Most lenders wouldn’t take your vehicle immediately after you miss your repayment the first time. The lender would simplyroll over your loan, which effectively gives you more time to come up with the payment in exchange for a fee. Repossession would just normally happen when you can never repay what you owe.
It’s sad that many are putting title loans in the Beehive State in a bad light. While several misconceptions may cloud your decision, make sure to do your due diligence to ensure you know what you’re signing up for.