Car Title Loan Scares
These days, many people are finding themselves drowning in debt or still suffering the consequences of prior unresolved debts. To stay afloat, some are turning to high interest, risky loans to make ends meet. Perhaps even worse, are the predatory lending practices of some agencies to take advantage of these consumers.
Poor credit scores, a history of repossession or collections, and stingy lenders can all make getting a secured loan more difficult. Subprime auto loans target people with poor credit or complicated loan histories, with the lure of fast cash. The reason these loans are easy to obtain is simple: complicated and costly repayment terms. These subprime loans are often associated with higher rates of payment delinquency. As a result, lenders usually require a hefty down payment and a co-signer. The co-signer is responsible for the loan if the primary borrower has defaulted or has been unable to make the payments. Further, some people have found themselves trapped in a cycle of auto loan scams and predatory lending agreements when they try to take advantage of these kinds of loans.
For the consumer, the problem is twofold. First, some consumers in this financial hardship already face challenges with money management or are more likely to experience financial hardship during the life of the title loan. Additionally, lenders often prey on people they deem as high risk, hoping for default. Once default happens, the lender repossesses the car and sues the consumer for the loan balance. Not only does the lender retain possession of the car, often reselling it for profit, but they also sue for payments from the consumer.
Unfortunately, this type of predatory lending has been commonplace in recent years. However, there are ways to get out of a bad loan and manage debts. A Sacramento bankruptcy lawyer can help you fight your debt problems and regain control over your financial future.