Florida may be out of a recession, but it always seems that people are tight on cash. When this happens they will look for ways to get cash for short term financial needs. We all know about payday loans and instant cash advances but those are tough because the rates are high and you often can’t borrow much. With a title loan, Florida residents can get a hold hold of the extra cash in a short period of time. Using you car vehicle’s collateral is a great way to get emergency financing when you have bad credit or don’t want to deal with a bank or traditional installment loan lender. However, there are stories about people taking out a car title loan with hopes of paying it off in weeks. Only later do they realize that they owe more in finance charges than the principal itself. Many wonder that how a legal financial obligation can be like this. But it does really happen and one can avoid such situations if he choose a company wisely and pay the equity loan on time. One of the main culprit of high fees for with Florida online lenders is the rolling fees.
Title loan companies usually charges a high rate of the principal borrowed. Consider the APR for this loan, it would be somewhere in the range of 100%. In some extreme cases, some Miami based title loan companies will charge rates as high as 200%. In this situation, the pay back period is calculated by days rather than weeks. An online lender that provides $100 will require a payment of $115 on payday. If the borrower misses the payment, it will be rolled over to the next payment date and the next payment will then be $130. If this sequence is repeated for four pay periods, the borrower owe a total of $60 in finance charges, that’s a full 60% of the principal. When a full seven pay periods has been rolled over, the finance fees will be more than the original amount of money borrowed. This is really one situation where it should be avoided at all cost. We know there are regulations in Florida that are supposed to stop fees and interest from rolling over. However, they don’t always apply to borrowers who seek out online title loans. Also, there are local lenders in cities like Fort Myers, Miami, and Orlando that attempt to skirt licensing restrictions. For example, Miami requires some businesses to obtain a permit or business license before they operate in the city. Check your city and county requirements before signing a contract.
One simple way to avoid this situation is to research the rates before even taking out a cash loan. Many borrowers need cash for an emergency. They look past the situation and understand it’s a short term request. Some applicants take out the loan without carefully comparing rates between each online lender. Many times they go with a higher rate loan with a title lender who promises them more money up front. A Borrower should spend a couple of hours online understanding the payment structure. Search for better first time deals online before taking out vehicle equity financing. Work with a local Florida title loan company who provides rates and fee disclosures before you sign up. We know by doing this they can reduce or eliminate some of the fees involved.
The other obvious way to avoid roll over fee is to pay back the title loan on time. This is a simple and realistic way to avoid the rolling fees. Work with your local Florida company to automatically deduct from the pay itself. You can reduce any tendency not to pay and make sure that it is a full repayment and not a partial monthly payment. Most cash advance firms will allow a partial payment, but this is nothing further from the truth. The next solution to emergency cash is to consider other sources of credit. Even though credit card also charges a high interest rate, it is still lower than an installment or payday loan. Increasing your credit card bill will impact your credit score. So, the same old rules apply, pay your bill on time without fail. By doing this you don’t need to work with bad credit lenders when you need same day cash.
Use a credit counseling service to help individual to plan out the finances. A Credit counselor can usually help to point people towards sound financial services. Most reputable car title loan lenders will help you find a licensed firm that provides these services. They will work to improve your credit score and help setup a monthly budget. Our article explains the way to reduce the finance charges for short term financing. You should not consider a title loan in Florida if the need is not critical. Instead, plan your finance properly and take control of your finances.