Most people look at their budget when taking out a home mortgage or car loan, but what about a short-term auto title loan? Do you consider your finances, monthly bills and household budget when you are preparing to borrow against the collateral of your car?
Often times auto Car Title Loans Los Angeles are taken when a borrower needs fast cash for emergencies or unexpected costs. This doesn't leave much time to consider the impact repaying your loan will have on your budget and bank account. Taking some time to think about whether or not you will be able to afford paying back the loan, if it will drastically affect your budget, and what you will do should you default on your payments, could be the deciding factor in whether or not your budget can survive an auto title loan.
Budgeting isn't easy for everyone but most financial experts will agree; making a budget is one of the smartest things you can do for yourself and your money. The thought of putting your expenses into categories may be a bit daunting but with time you can see exactly where your money goes, how much you spend, and how much you could potentially be saving.
Before you take out an auto title loan, consider looking at your budget to make sure you can afford to pay your loan back. If you have yet to form a budget for your expenses, consider the following steps to help get your finances in order:
1) Save for retirement - Putting aside for your future has got to be a priority if you want to be able to retirement and enjoy the fruits of your labor. Retirement websites and budgeting books can help you understand how much you need to save for retirement. Look at your income and expenses and decide how much of your overall income you want to put aside for the future. Consider your age, your portfolio balance (stocks, annuities, etc.) if any, and the number of years until you retire. Most financial experts recommend saving 10%-20% of your gross annual income. Check with your employer's human resources department about the options of a 410(k) or 403(b). Keep in mind, if you take out an auto title loan and choose to pay it back out of your retirement fund, you will be penalized.
2) Set a goal - Make a commitment to set aside part of your monthly income for an emergency fund, vacation or something you want to buy in the future. The key is getting into a habit of setting something aside, instead of spending. If you can get yourself in a good, steady routine, you may be able to avoid taking out a car title loan because you will already have the cash you need in a savings.
3) Track your expenses - Look at six months of bank statements and/or receipts and add up the amounts. Then divide by six to get an average for what you spend every month. This will help you see where your money goes and whether or not you are living within your means. If the average is more than what you bring home in income, this is red flag. You will need to look at your spending and figure out where you can make cuts. If the average amount is less than what you bring home, you can still make cuts in certain spending categories and add to your "savings" category.
4) Make it automatic - Set up an automatic transfer to your savings account so that money will be taken out on a monthly basis. This way you won't be tempted to spend that money on something else.
If you are undergoing a financial crunch and it is getting difficult to manage the household or additional expenses, getting a vehicle title loan isn't a bad idea. There are several benefits of the loan, if used judiciously and bought from a wise firm. Let's read more about pros and cons of car title loans.
Getting cash can sometimes be embarrassing and stressful. The current financial situation has caught many families not prepared to spend more cash than their average expenses. A constant increase in medical costs and other extra expenses are pushing most families into financial dilemma. The financial situations of many families can nowadays be interrupted by a simple purchase of essential things. Advances from payday or credit cash are some of the financial options you can consider in order to get additional cash. Nevertheless, these financial options might have extra problems than assistance. It is not a good idea to add extra debt to yours existing huge debt burden on your credit cards. For example, payday charges high interest rates on their loans. Therefore, you should consider getting vehicle title loans. Their interest rates are low and allow you to get instant cash without hustling.
Advantages of the car title loans
Vehicle title loans provide loans to both those with poor credit or do not have any credit at all. The eligibility for loan is not determined through credit evaluation like other traditional loan providers do. This makes the best option for less credit car owners who do not meet the minimum credit score for loan eligibility.
The other main advantage for the vehicle collateral loans is that their interest rates are low and flexible compared to other types of loans. This is due to their added security. The application process is also very simple. You only need an internet connection either on a phone or computer. Just fill the application form available online and submit then wait for few hours to get your loan. The requirement for loan approval is also simple. You are only required to be at least 18 years and have a 10 years old vehicle. The other only requirement for loan approval is that your car must have a valid title for it to be used for security. Provided your motorcycle, truck, car or vans have valid title, you can use them as collateral.
The whole application process vehicle collateral loans can be done from any place. It can either be home, office or any other place. Internet is the main requirement for application to be done. It only takes few minutes for your car title loans to be approved which is a great contrast to the duration other traditional loans takes for them to approve loans. Decisions are made much faster and the cash are disbursed one a single day. This promotes efficiency and effectiveness.
Disadvantages of the loan
Despite many advantages vehicle title loans have, there are other minor disadvantages. In case of failure to repay the loan, there is repossession of your car. This might lead to you losing your prestigious car just because of the loan you owe the loan providers. The other disadvantage of this type of loan is that their low interest increases eventually in case of a failure to repay the loan within the stipulated period of time. Always ensure you make the right choice when considering getting some extra cash.