Finding yourself in a financial jam is never a good thing. When unavoidable emergency expenses arise, you must consider every option available for earning and borrowing. Often, short-term borrowing provides a quicker solution. If you own a car, truck, or motorcycle, you have the collateral to borrow funds, although options may still turn out limited. A pawn shop looks like a decent solution but pawning a car comes with some hassles. Maybe a car title loan would work out better.
The Pawn Shop Catch
A pawn shop will offer a fairly straightforward deal on a short-term loan. The pawn shop's rep will assess the value of the car and make an offer. If you accept, you receive your loan. The catch here is the pawn shop keeps the vehicle. Without a car, you are stuck finding alternate means of transportation. If you run into transportation troubles, problems with paying back the loan may arise. That could lead to losing the car. Here are two things to think about when looking at car title loans:
- Financial Benefits to Keeping the Car
Anyone who owns a car both free and clear can borrow money by putting up the title as collateral. Different title companies present their rules and requirements, but one thing remains consistent: the borrower keeps possession of the vehicle. You might not think about the benefits associated with keeping your car, though. Perhaps you feel public transportation or a moped would be enough to carry you during the workweek. While the alternatives have value, certain drawbacks exist. Transit workers can go on strike. Certain lines don't run after a specific time of the day or on weekends. Mopeds and bikes aren't joys to ride in the rain. And remember that anything that impedes your ability to go to work or put in extra overtime hours impacts repaying the loan.
- Personal Benefits to Keeping the Car
The financial benefits aren't the only ones gained by keeping your car. Scores of personal situations may arise, and access to reliable transportation helps navigate troubled times. What happens when a relative becomes ill and you must go back and forth to the hospital? Taking public transit or relying on rideshare services adds both inconveniences and unwanted expenses. It is usually easier to drive your personal vehicle. Why give it up?
Don't overlook these benefits when weighing offers for car title loans. Pawn shops may seem easy to deal with, but they also want your car. A car title loan preserves your use of your car while getting you the money that you need.
