Every state offers their own laws regarding the use of car title loans, however, one thing holds true for most title loan lenders, which is that they tend to prey on people with low income. It makes sense for title loan lenders to promote themselves to an audience who might have lower income, simply because they tend to be the demographic that is in the most need of “quick cash”. Are these online registration loan lenders actually taking advantage of these individuals or just utilizing their skills to stay in business?
Individuals sue title loan lender in Florida
A Florida couple Janet and James Schmitt found themselves, like many Americans, in a financial crisis. Following a costly surgery, the couple decided it would be best to use their 2010 F-150 vehicle to obtain a car title loan. It seemed easy enough and it would help them focus on paying bills while they both continued to work part time. The amount they received came from the title loan lender InstaLoan, who offered them $2,500. After working to pay off $1,400 in just 4 months, the company claimed that the couple still owed the full amount they were given. This just didn’t sit well with them and they met with an attorney to go over their options. In an effort to make sure they were not being taken advantage of, the couple decided to sue the loan company. They hope that in doing this, they might also be helping other low-income individuals from the getting the same unfair treatment.
Experts weigh in on title loans
Experts believe that car title loans are specifically designed to take advantage of those with low income. These individuals struggle with everyday living expenses, and so if they have a vehicle with registration in their name, they can get quick cash. Title loan lenders also tend to promote the fact that they do not run credit checks, which statistics show that lower income families tend to have lower credit scores. This makes it even more enticing for low-income individuals to “take the bait” and apply for a car title loan. Unfortunately, when they are struggling to pay the bills with their income as it is, getting a car title loan will not help because they have to pay it back or risk losing their vehicle.
Similar situation in Tucson
The holiday’s are an especially enticing time to get a car title loan because a person needs money for gifts. Commercials and online advertisements swamped the Tucson area over the 2015 holiday season, which attracted the attention of Scott Sweetalla. He shopped around for different loans to help him out with gift shopping and thought he found the best deal. He was offered a $2,000 registration loan and would only be required to pay $150 per month. Even though he was told interest payments would be low, they ended up costing an additional $300 per month, totaling a monthly loan payment of $450. Eventually, his vehicle was taken by the loan company, but now he wants people to be aware that car title loan companies will prey on the low-income population and everyone should be cautious.