Getting a loan can be a nervewracking process. Why wouldn’t it be?
You know someone who lost their business because they couldn’t pay back their loan in time. You know another who’s struggling to pay their bills because of credit card debt that got out of hand. Mishandled loans are a common story in the United States today and something you want nothing more to avoid. Vehicle title loans aren’t something to avoid at all costs, but rather a resource that can help you get some independence in a way that suits your budget. This means doing some research on how to get a loan the right way.
Here are some quick statistics on vehicle title loans and what to know when submitting your first application.
Car Loans Are Extremely Common
Even if you haven’t taken out a car loan in the past, you likely know someone who has. A recent study found out a record-breaking 105 million Americans are currently paying toward an auto loan, if not several. The year 2017 held the distinction of seeing auto loan debt making up nearly 10% of the total American debt balance. The average loan in that same year, for a new car, was around $30,000. Your first step is to specify why you’re taking out vehicle title loans in the first place.
Americans Borrow Money For Several Reasons
When you apply for a loan you’re admitting you don’t have quite enough funds to see your dream realized. This changes from person to person. The top three reasons Americans take out personal loans today are vehicle expenses at 30%, keeping up with bills at 25%, and personal emergencies at 20%. Entire vehicles can be paid off with a loan, while others just want a boost up. Figuring this out is key to ensuring you don’t go overboard and accumulate debt instead.
Debt Can Be Easy To Accumulate
The last thing you want to do is owe more money than you started out with. In 2017 Americans owed just over $565 billion in car loans alone, which doesn’t even scratch the surface of student loan debt and medical debt. While personal loans can range between a mere $50 to over $200,000, the personal loan average has remained steady at $7,500. When you borrow money it’s essential you be honest about what you need before what you want. This can help put things in perspective when lofty goals get too tempting to follow.
Auto Loans Will Only Get More Common
The need for good vehicle title loans is only going to get higher from here. The Bureau Of Labor Statistics determined nearly $2,000 a year is spent by the average American on clothing alone. Around 70% of the American population has less than $1,000 saved for emergencies, to boot. Loans are a way to fill in the gap left by a lack of funds and increase your options. The fastest title loans should still be approached with the future in mind, instead of immediate satisfaction.
The Right Loan Should Suit Your Budget
Which loan suits you best? It’s time to take a look at your average monthly income and your credit score to get a bigger picture on what’s in store for you. A maxed-out credit card uses 100% credit ratio, but despite this FICO recommends your credit utilization ratio shouldn’t be higher than 30% of your original limit. Should you need to work on your credit before a loan it’s also recommended you start out with small purchases. As the saying goes, “Slow and steady wins the race.”
Vehicle title loans are a useful tool to give you a leg up. Face your fears and see how Arizona title loans can give you more choices, not less.