Friday 28 December 2018

How To Solve Temporary Financial Distress

By Douglas Thomas


Every adult loves to own a car. It really is the dream of every college boy. They would haggle with their professors to get good school ratings when parents require it before they can have their dreams of having an automobile. These things are great come on for would be girlfriends. It certainly is a great medium for dating in drive in movies. Well, there are just times when one is short of money. The only thing to do is sacrifice the car and go for Title Loans Orlando.

Sometimes it is heartbreaking to part with things that people value especially jewelry heirlooms, useful gadgets, or even the car. But these things happen whether we like it or not. Life is not just all smiles and laughter. Sometimes the blues take over in the form of financial constraints. During these times, items have to be sold or used as collateral for a loan.

The finance and banking sector offers plenty of loan facilities to borrowers. This service is a standard business practice. With this service, people can borrow small sums of money for personal use or large amounts to purchase the property. The only guarantee that the lender or the creditor has is by way of requiring collateral in the form an automobile.

For smaller monetary needs, some people just have to temporarily do away with their valuable items. They pawn the items where money is given reckoned on the item value. These are interest bearing transactions which will have monthly interest payment with the principal becoming due on a fixed schedule. The pawnshop will become the owners of these items if not redeemed.

Loans wherein a vehicle is the collateral has very high interest rates compared to other personal loans. This credit facility is not permitted in some states, but in those that allow it, strict government rules and regulations have to be followed. The legislation is design to protect borrowers by limiting the duration and size, especially when it involves a sizable amount of money.

To a certain degree, it operates similarly to pawnshops. The big difference is that in pawnshops the item pawned is in the possession of pawnbrokers whereas, in auto lending the cars stay with the owner who still uses it. Only the ownership title is in the hands of the lender. Normally the amount loaned will just be a fraction of the value of the vehicle.

To secure this credit facility, all one has to do is to drive the automobile to the lending shop and provides the lender with the auto title. The duration of the transaction will not take long and the borrower can get the money right away after doing the paperwork. This will be repaid in a specified time frame and the borrower has to pay the principal amount and other fees in a single payment.

If the borrower really has no financial wherewithal to pay the principal or the interest, then the lender can legally take hold of the car and put it on sale. However, there are a number of states that do allow renewals or extensions, and even payment on an installment basis. This operational structure is similar to how a pawnshop operates.

It is but normal in life to experience some financial distress from time to time. After all, this is what makes life exciting. Life would be a bore if there are no challenges. So there really is no shame in securing a loan. People who belong to lower financial strata are the most affected when it comes to this. It would be wise for these people to make inquiries first before entering into any of these transactions.




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