Payday loans pwn car title loans. No comparison. Title loans try to compete, but it's tough because they have all the bad points of payday loans, and none of the good ones.
If you've used payday loans but haven't heard of title loans or don't know much about them, consider yourself lucky.
People complain about payday loans charging high fees. Well, title loans are about the same, except here's the difference: if you don't pay, they come and take your car. Ouch.
I bum a ride from Daniella a lot, and when she picked me up yesterday, she said, "Hey, do you want my car?"
She knows I'm saving my money to buy the next Sonic the Hedgehog video game, so I can't afford to buy a car, and I knew she wasn't giving it away. "What's up?" I asked.
"Nobody else wants it either!" She was laughing, in a good mood. She told me that a car title loan place had had a thirty-day loan on it for the last three or four months. Some people think that they're like pawn shops, where you have to give up your car till it's paid off, but no--you can still drive your car and nothing changes except the company holds onto the title, literally, till you pay off the loan.
But that means if you don't pay, they can also just come over and drive the car off, since the title is theirs. It's important to learn the details before getting involved, and the laws vary in different states, since there's currently no overall federal regulation. Search the internet for title loans and your state to find local laws.
Daniella said she couldn't pay, was in tears, afraid to lose the car, but she didn't know what to do; she couldn't take it anymore. "They were charging me fees every month, and I kept trying to pay on the balance but the interest ate up everything I paid. It just wasn't worth it. So finally I emailed them and said fine, take the car. It's yours."
A couple hours later, she got a phone call. They didn't want her car.
"My poor little unwanted car. The guy said I could pay in four installments, no more interest, no more late fees, and if I paid it on time, I could keep the car. Hell yes. That's what I wanted. I could do that."
She got lucky. It happens. Repossessing a car and reselling it is a hassle, and car title loan places would rather just get the money straight from you if your car's hard to resell. But if your car is valuable or is the kind that's easy to sell, and you default, you can bet they'll go for your car, every time.
It's like debtors prison in the old days. Most people really want to pay off their debts, but if you put them in prison, how are they supposed to get a job to do it? Well, same thing. Car title loans prey on people with bad credit who need money. But when you default, they can take your car so you aren't able to get to your job.
With payday loans, it's not like they own your car or your furniture or your house and can come take it whenever they want, if you default. You'll have a place to live and a way to get to work, even if you have trouble paying back a payday loan.
If you need money fast and can get it without handing over your car title or anything else, then the choice seems obvious: hold onto your title. Get a payday loan. Title loans suck.
6:45 p.m. January 18
sonic the hedgehog??
6:59 p.m. January 18
9:22 p.m. January 18
"pwn" is a perfectly good way of saying "are much better than". Hip, even. Cool. Like Sonic the Hedgehog.
1:12 a.m. January 18
If that isn't the pot calling the kettle black. Payday loans are every bit as predatory as title loans, if not more so. You shoudl NOT be promoting payday loans.
8:43 a.m. January 19
If you don't need a loan, don't get one. He's warning people about car title loans, which are bad, for just the reason he said.
5:03 p.m. January 21
A car title loan is a non-recourse loan. Unlike payday loans, a consumer can't take out more than one since there's only one title to a car, so he or she won't become overburdened with debt. Most loans are paid back within six months. A car is only repossessed as a last resort, but if it does occur, all proceeds from the sale that are in excess of the loan balance are returned to the customer.
9:37 p.m. January 21
Non-recourse? Nonsense. They have a recourse. They can take the car.
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