Many people in Orlando live paycheck to paycheck, and sometimes there is just not quite enough money to pay for the essentials. In such cases, many people turn to payday advances or car title loans. Unfortunately, such decisions tend to end up leading people into seemingly endless debt.
These loans are often very attractive to people who are short on cash, because they provide them with money right away. And, they are relatively easy to obtain, even for those with low credit and low income. But these loans come with very high interest, often making it nearly impossible for a person to get out of this debt.
For example, a person who takes out a $1,000 car title loan will be likely have to pay back up to $4,000. And because title loans are borrowed against one’s motor vehicle, the lender can repossess your vehicle if you cannot repay your loan. According to a recent study, one of every six title loans results in the repossession of a vehicle.
These loans are very risk for consumers and they should be avoided. Those who need help making ends meet might do better considering other options instead:
- Talk to your employer about a paycheck advance.
- Cut back on your expenses. Canceling cable, eating out less and limiting energy consumption to may be a few options.
- Borrow money or ask for support from friends, family, or your church. Or, talk to a charitable organization about options that may be available.
- Think about calling billers to request more time to pay. Also, ask them to waive late fees.
- Talk to a reputable bankruptcy attorney about debt relief options.
Source: AARP, “Car Title Loans May Wreck Your Finances,” Lynnette Khalfani-Cox, Jan. 17, 2014