Title loans are big business in America. Actually, let’s correct that to read huge business, with $3.6 billion in profits earned on the 1.7 million title loans that are taken out each year, adding up to $1.6 billion. Today, we’re going to have a look at Overnight Title Loan and Title Loan Cloud, which are the same company. But they’re not actually title loan providers, as you’ll see.
Title loans are short-term, low-dollar, high-interest loans that are considered to be highly predatory, which means they prey on the very people who are the least able to afford them. To get a title loan, all you need is a government-issued ID and a car that has a lien-free title in your name. You take the car and the title to the lender, who assesses (low-balls) the value of the car and offers you around 25 to 40 percent of what it’s worth. That way, when you default on the loan and they repossess and sell your car, they’ll make a lot more money.
Title Loan Providers Want Your Money. All of it.
Type “car title loan” into your browser a couple of times, and most of the ads that pop up as you go about your normal Internet business will be those which entice you to take out a title loan. The lenders are like those scammers who sell you a trip to Disneyland and then ship you off to a ravaged wasteland where you’re chased by swarms of grasshoppers. These loan can – and often do – lead to a financial apocalypse for those who aren’t prepared – or in any way able – to pay them back, and this is exactly what the lenders are banking on, literally. The more months you spend paying the exorbitant interest because you can’t afford to pay back the principal, the more money they make. That’s why lenders don’t check your credit. That’s why most don’t require any proof of income. And that’s why there’s a two dollar profit to be had for every dollar they lend.
Choosing a Title Lender
The four most important factors to consider when taking out a title loan are the interest rate, fees, extra requirements, and length of the loan.
Interest rates for title loans typically start around 300 percent APR, which means that at the end of one year, a $1,000 title loan will end up costing you a total of $4,000. Although interest rates may be lower than 300 percent, they’re probably more likely to higher.
Fees can add up to an additional hundred dollars or more. Lenders may charge a processing, document, late, or lien fee, and they may even charge you a fee for repossessing your car.
Extra requirements will likely include turning over a spare set of keys, the purchase of a life insurance policy or a roadside assistance plan, and allowing the lender to install a GPS tracking device on your vehicle to make it easier for them to locate after you default on your loan.
The term of a typical title loan is 30 days, but there’s not a lender out there who expects you to – or wants you to – pay it back on time. It’s in the rolling over of the loan’s principle that they make their killing.
Overnight Title Loan and Title Loan Cloud
Now, title lenders advertise heavily on the Internet, and Overnight Title Loan seems to come up a lot. So I headed over to their site, read through the information, and learned that Overnight Title Loan isn’t actually a lender, but a service that hooks you up with a lender. I thought that was pretty odd, since finding an actual title lender is about as hard as finding a vehicle on any city street.
All you have to do to get your title loan using Overnight Title Loan is fill out a short form with your name, email, phone number, and make, model, and year of your vehicle. Overnight Title Loan will forward the information to your nearest title lender, who will then call you with the details of how much they’ll loan and where you need to go to pick up your money.
Basically, Overnight Title Loan and its sister “company” Title Loan Cloud are bottom feeders that are trying to make money any way they can. You can’t quote me on this, but through extensive research, I found strong hints that Overnight Title Loan is somehow affiliated with Wilshire Consumer Credit, which is associated with customer reviews that are the stuff of nightmares. Wilshire Consumer Credit has a Partner Advantage Program whereby a business can set up a website like Overnight Title Loan and Title Loan Cloud to help flood the internet with title loan offers that lead right back to Wilshire. According to Wilshire: “As a partner of Wilshire Consumer Credit you will be able to provide your customers with the cash they need at low rates with affordable monthly payments.”
Don’t Do It!
If you’re considering taking out a title loan, don’t do it until you’ve exhausted every other possible avenue for getting emergency funds. And if you still end up needing a title loan, do your own search and find an actual lender that’s as reputable as a title lender can possibly be instead of signing up to receive electronic junk messages through a third-party service that has nothing to with actual title loans.Drive-Safely.net has your back, and we’re working on a long list of title lenders that we’ll review for you. This first review should serve to steer you away from any type of third-party entity that offers to find a title lender on your behalf.
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