Car title loans now carry comparable interest rates to credit cards. Is it because these short-term lenders decided to lower their rates? Not really; some states have capped the interest rate amount which title loans in West Palm Beach can charge against outstanding balances. How did they get to be in similar ranges then?
Many folks, who have experienced financial difficulties or have seen their debt totals significantly increase, may also note that their credit card interest rates have also followed suit. It is not unheard of to see creditors begin charging 29% up to the 39% at a moment’s notice. When the interest rate is hiked, it affects the total balance. What you bought twelve months ago at 14% interest may now be carrying a 29% interest.
What makes credit cards raise the interest rate?
*Late payments – It is imperative that bills are paid on time; it is not worth the potential problems by missing the deadline.
*Full balances – If you are carrying a maxed card for an extended period of time, the lender will increase rates.
*Credit score is lower – Make a mistake with a completely different company and a creditor can raise your interest due to the new risk factor you project.
Not only does a borrower need to pay close attention to due date, but also debt totals and for how long they continue to be unpaid. Any one of these factors may wipe out low interest rates without notice.
A car title loan lender will keep their interest rates stationary throughout the length of time it takes to pay back the loan. In a perfect world, the title loan will be paid off on the original due date; for the rest of us, it may take a few months to pay it off. The loan is not factored into your credit score as it is not reported to the credit bureaus as debt. The title loan debt will not play a role in negatively affecting any other current debt.
Sure there may be some pressure to get the loan paid off, but why would you want to take your time getting rid of the short-term debt? Keeping it over a lengthy period of time is the marketing tool of the credit card companies. The longer you take to pay off your debt, the more open the account will be to error on the debtors part, as well as a good possibility that some of the available balance will be reused.
When your finances have fallen into a crisis, take this no credit check title loan and solve the problem. Once you do this, create an immediate plan to repay this loan as soon as possible. It is the best way to handle your budget. The less debt you carry around with you, the more money you have to put towards proactive financial measures. Start up a savings account, put money away for retirement or into your child’s college fund. Living debt free is the more economical approach to a financially stable life. Just because you can afford a small minimum payment each month does not mean you can afford to buy it. Pay close attention to the interest rate details in the fine print. Car title loan lenders may be the more cost effective approach to a financial crunch.