The Center for Responsible Lending reports that each year, car title lenders earn $4.3 billion in fees on loans that total $1.9 billion. Title Max is one of the bigger of these lenders. The company says that since opening in 1998, it has expanded to more than 1,100 locations in the United States.
Fast Cash Alternatives
You know that title loans are a bad deal. But what alternatives do you have if you need fast cash?
There are some. Of course, they all come with drawbacks, too. It’s not easy to find a great deal when you need money quickly.
Your best bet might be to borrow money from family members or friends. Make sure, though, that you pay back these loans quickly. Otherwise, you can easily ruin your relationships.
If you can’t borrow money from friends or family, there are always credit unions and banks. You can apply for a personal installment loan from these sources. In an installment loan, you’ll pay back a portion of your debt every month, with interest, until it is paid off. Banks and credit unions will charge you interest on their loans, but their interest rates will be far lower than the interest you’d pay on a car title loan. The challenge? You might not qualify for one of these loans if your credit is weak. The application process might take time, too, meaning that you might not gain access to the money you need before your other bills come due.
Car Title Loans Are Big Business
You can also turn to your employer for help. Maybe you can secure an advance on your next paycheck that you can use to pay off your upcoming bills. The problem here, of course, is that your next paycheck when it does arrive will be smaller. At the same time, your boss might reject your request, and this can make for an awkward office environment.
The truth is, there is no perfect option when you need cash and you need it in a hurry. The best approach is to build up an emergency savings fund that you can tap whenever a financial emergency arises. Financial experts say that you should have at least six months’ worth of living expenses saved in one of these funds at all times. (See also: Change Jars and Other Clever Ways to Build Up an Emergency Fund)
That sounds overwhelming, but there’s nothing wrong with building up that fund slowly. Deposit what you can each month, even if it’s as little as $50. Before long, you’ll have grown a solid emergency fund. Then you won’t have to worry about title loans or other sources of fast cash.
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