Fast Auto Payday Loans: Leveraging a Common Resource

[Jun 23, 2009.]

 

Not all payday loans need be tied into a checking or savings account. In fact, there are other personal resources that can be used to back such a loan. Take the car for example. Most families own more than one, which makes it the perfect backing to acquire an emergency payday loan.

Despite the negative attention that the car title loan industry receives on a daily basis, the fact is that it gives consumers an additional venue for acquiring emergency funds to handle unexpected expenses. If handled responsibly, fast auto payday loans can get a borrower out of some pretty tight spots.

How Fast Auto Payday Loans Work
The Atlanta Journal-Constitution outlines the typical process for securing payday loans with an automobile. The borrower requests a specific loan amount based on the value of the vehicle (i.e. $500 on a $20,000 value). Then the borrower is placed on a repayment schedule that stipulates when and how much of the loan should be repaid. The borrower keeps the car in the meantime--just some basic paperwork is required to complete the transaction. When the loan repayment is satisfied, the paperwork is then returned to the borrower.

Payday Loans: Avoiding the Downside
Title lenders routinely provide services to those with bad credit, low-income individuals, military service members, and the elderly. Invariably, there are some situations where these borrowers run into difficulty repaying fast auto payday loans--repossession is often the result. According to ResponsibleLending.org, here are some ways to avoid such a situation:

• Compare Interest Rates. Payday loans providers are competing for business, so finding a lower APR is possible with some searching.


• Avoid the Rollover. Also called, flipping, rollover is when the loan can’t be repaid and a new loan is taken out to cover the first.


• Know the Auto Value. Consult the NADA or Kelly Blue Book for auto values before entering into an agreement.

Fast Auto Payday Loans Protective Legislation
Recent safeguards have been situated to help protect consumers from entering into disadvantaged payday loans. Some include the establishment of fair and affordable loan terms, protections for borrowers after default, more intensive lender monitoring and the closing of loopholes for consistent regulation.

A final word on fast auto payday loans--verbal agreements are never valid and should be disregarded. Every article in the deal should be written plainly and explained to the borrower in detail. If that doesn’t happen, simply walk away from the deal.

 

About Author:

Kelly Richardson is a freelance writer, marcomm consultant and digital entrepreneur. He’s written content for Fortune 500s Google, Yahoo!, Microsoft and Wells Fargo. Find out more about him at kellyrichardsoncopywriting.com.