Thursday, July 6, 2017

Car Title Loans In San Antonio And Texas

Let's face it...there's no state in the union like Texas.  My love for the Lone Star State began in the city of El Paso, the first U.S. city I set foot on.  Every time I travel to Texas, and I've also been to Houston and Dallas, I feel very much at home.  The cowboy hats, the boots, and other Western attire people wear regularly in Texas...well, that brings a smile to my face, being born in Chihuahua, Mexico.  Unfortunately, here in California, you're more likely to see shorts, tanks, and flip-flops.

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Two major cities in Texas I still have to visit are San Antonio and Austin.  I've heard great things about the River Walk and Austin's food carts.  Well, this post isn't all about Texas tourism and its nuances.  I'm actually here today to talk title (car) loans in San Antonio and Texas.  I'll be breaking down this topic as comprehensively as I can, to give you the ins and outs of this financial process.

First, a "title loan" is a short-term (30 days), potentially high cost, secured loan (because your vehicle is the collateral).  People who are in dire straits, needing for example, cash to pay their rent, a medical emergency, or an unexpected and must fix repair are the most likely consumers of title loans.  Why?  Perhaps they've tried to get loans conventionally from their local bank/credit union and didn't qualify on the basis of low income, bad credit, or both?  Perhaps they didn't have the luxury of time to go through with a loan application from a bank, meaning, they needed cash urgently?

So how does a title loan work?  Nowadays you can provide all of your pertinent information about your car online and get an estimate amount of what you can borrow.  In other words, the process has gotten a whole lot easier.  You can expect a lender to give (qualify) you as much as half of your car's value and sometimes, depending on the lender, you may qualify for more.  As a consumer, you are entitled to a full breakdown on the loan terms.  This includes being told exactly how much in "prepaid finance charges" you'll have to pay upfront.

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You can expect to pay a high Annual Percentage Rate (APR) for your loan.  Typical APR(s) for a title loan can be anywhere from 300-400%.  Bad?  Yes, especially if you don't pay-off the loan when it's due, meaning, like in 30 days!  You should be expecting to get paid from work (or another source of income) enough money to pay off your loan in the allocated amount of time.  Think about your title loan like a credit card payment on steroids.  You wouldn't want it to get out of control.  The finance fees include simple interest that you'll be responsible for in addition to the loan principal.  So please make an effort to understand every fee you're responsible for.  The last thing you need on your plate is your car repossessed.  Yes, this is the ultimate risk with these types of loans.  Although you get to walk out with money AND your car, if you don't pay anything and don't communicate, expect a repossession.

What if you can't pay off the loan in full when it is due?  Please go back to the lender and have a heart to heart talk with them.  They may allow you to refinance, meaning, the loan will be renewed and you'll have to pay another fee to start the process again, albeit under different terms.  This isn't what you want, of course.  If you have to refinance more than once, you probably shouldn't have ever taken a title loan out.


1 out of 5 auto title loans result in a car being repossessed (Source: Consumer Financial Protection Bureau, or CFPB, 2016)

Approximately 2 million Americans take out an auto title loan each year (CFPB, 2016)

In Texas, you can expect to pay about $23 for every $100 of borrowed funds.

My Advice

I'd like for you to first exhaust all of your possible options for fast and easily accessible cash before going to a title lender.  Note: A Payday lender is not one of them.  This means talking with family, close friends, and even buying yourself more time somehow so you can apply for a conventional loan with more favorable borrowing terms.  Only after you have exhausted all your options should you consider taking out a title loan.

Make sure that your lender is up front and gives you the exact APR that you'll be paying.  This is the interest rate you'll pay if the loan were to be carried through a whole year.  Don't just let them give you the monthly interest rate because this doesn't include any additional fees and charges.  Also, read the fine print.  I can't stress this enough.  People got bad home loans in the early 2000's because they weren't reading any of the print and we all know how that turned out.  Lastly, before taking any action, look to see if your city in Texas has passed any ordinances or regulations that are favorable to consumers.  You want to know when lenders are crossing the ethics line, right?

Well, I know many of you are hurting out there.  No matter how tough it gets, don't lose your head.  Keep making sound financial decisions for you and your family.  Thanks for reading!

Disclosure: This is a sponsored post, meaning I'm being paid to write it and to provide links for

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