We all go through ups and downs in our lives, especially when it comes to financial security. There are times when everything is going smooth, your bank balance is high, life is good. But then, as the wise man say, God balances every moment of joy with a moment of sorrow. There are the dark times. Times when cash seems to be slip through your fingers, burning faster than ever before. It is at moments like these when loans come to our rescue. They are a gift of the financial world which help us through the tough times. But what if your credit rating is poor and the bank is unwilling to provide you with an unsecured loan at a short notice? This is when a vehicle title loans enters the picture.
If you are in urgent need of money, you can secure a short term loan by putting up your car (the title to which you own) as collateral. This type of loan is called a car title loan because you are in effect giving up the rights of your car in exchange for some quick money. Borrowing money in this fashion can be a good idea if you are able to secure a loan from a lender who is not charging exorbitantly high interest rates. Most lenders and banks in Canadian cities such as Toronto, Mississauga and Brampton offer an interest rate which varies between 20-25%. Anything higher, do not go for it. The principal amount of a vehicle title loan totally depends on the value of the vehicle that you put up for collateral and also the condition of the vehicle. You can generally expect a high loan amount if your car or truck is new and if you possess the sole rights to the title.
Borrowing an auto title loan sounds a like good idea when you are going through a financial crunch but I would like to raise a point of caution to first time borrowers - Only sign up for this type of loan if you can repay the loan within a couple of months. Auto title loans are usually designed as short term loans and the lenders expect you to repay the full amount within four to eight weeks of borrowing. If you are not able to cough up the money by then, the interest rates can really put you in an ugly financial situation which if often more ugly than the situation you began with.
This is the only factor which makes car title loans high on financial risk. The good news is that various governmental laws prevent what a lender can and cannot do in the event of a loan default. Therefore, when you set out to borrow money against your car, it will always help you to do thorough research about the laws of the land, the bank/lender whom you are going to approach and your strategy for repayment of the vehicle title loan. Go online or call up a friend; the best method for short listing a lender is through a trusted source.
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