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Pay day and title loan dangers - YouTube
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well at this time of the year if money
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is short some people might turn to
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payday or title loan companies for that
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quick cash and while these businesses
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serve a purpose they however come with
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some consequences if you don't pay your
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loan back within a month whe you six on
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your side consumer reporter Don Dara
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says the interest rates are extremely
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high
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if you roll over that loan dog yeah
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especially a title loan companies as
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high as 300% and it is legal car title
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loans offer you quick cash in exchange
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for your vehicles title as collateral
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generally car title lenders have few
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requirements for potential borrowers you
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can often drive away with the money in
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less than an hour but these loans are
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expensive if you do not pay it back
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within one month so you need to
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understand terms of the agreement when
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did you buy this car June 2017 it's a
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Kia yes
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Geraldine Kline has been pleased with
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her six year old car which is paid off
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January of 2018 so you paid in full yes
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four months ago however mrs. Kline was
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short of cash using her car as
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collateral she took out a title loan on
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the 8th of July I wanted to bar exactly
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the 2500 but from my understanding it
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would be a long time to pay it back and
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I asked her how long she said maybe
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about a year and I said well that's not
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too bad
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determine the title loan was for 30 days
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according to the contract Geraldine said
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she was told at the loan company she
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could roll over the advance however mrs.
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Kline says she was not aware that 267
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percent is the annual interest rate when
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I asked her how long would it take to
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pay it she said about a year so unless
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you want to pay it all at one time and
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she said you could do that next month if
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you have the money so far she's made
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four payments on the $2,500 loan
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I've paid a little over twenty one to
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twenty two hundred dollars already in
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four month if the payments going up and
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up and up that's the problem because
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when you live on a fixed income you
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can't just go and pay five fifty one
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month by state and federal laws title
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loan companies
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are upfront with their agreement terms
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and they're strictly regulated the Truth
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in Lending disclosure shows that your
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annual percentage rate is two hundred
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and sixty-seven percent now shall read
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that you know that's my fault for not
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paying attention to detail when you
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borrow twenty five hundred a lot of
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times it's very very few people can just
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pick it off in a month
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John fours a financial planner at UT
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Federal Credit Union says once a
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borrower gets behind on a title loan the
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interest rate piles up even though
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you're thinking I can do it is it's
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really tough so sometimes you think well
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I'll pay it off in a year when a year
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now that twenty five hundred you pay two
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thousand extra interest you keep it
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three years well now you paid eight
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thousand interest so then the problem
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gets worse rolling it over is the
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problem that's correct title loans are
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potentially risky because if you default
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you can lose your car
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in fact twenty percent of those who take
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out a short-term single payment car
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title loan will have their cars
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repossessed according to the consumer
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finance Protection Bureau and records
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show only twelve percent of single
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payment borrowers repay within thirty
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days mrs. Kline says she'll continue to
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make her loan payments and hopes soon to
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get out from under the debt you want to
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get the car paid off by when February of
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2020 now paying off a title loan is the
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most straightforward approach to
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avoiding high interest rates one option
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is to replace the title loan with cash
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is to take out a different loan a
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fixed-rate loan from a bank or a credit
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union which is often less expensive than
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rolling your title over month after
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month now if all else fails somebody
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close to you might be willing to co-sign
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and help you get approved for a loan and
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christen both the last thing you want to
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do is default on your title loan because
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you could lose your car and then ruin
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your credit as well no doubt about that
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Don thank you very much we want to take
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a moment also to congratulate you and
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recognize today's your 50th anniversary
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of being on broadcast television yeah
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wfg Fort Gordon Georgia television
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that's where it all started that's where
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it all started
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you say that black-and-white television
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a brand new second lieutenant in the
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United States Army with you my friend
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much so hey if you have a consumer
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question for Don cinnamon email or just
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want a cinnamon note say hey
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congratulations
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deidara wapt.com you can also call us
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six on your side hotline number a six
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five six three three five nine seven
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four
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