Cash Loans for Car Titles

A cautionary tale for those of you looking at this type of loan. It can be quite helpful, but if you aren't careful you'll end up paying way more than what you borrowed. Check out the full article at http://www.columbiatribune.com/2008/Jul/20080721Busi012.asp.

"Among the cashed-out economy’s trapdoors, the auto title loan can be one of the most costly as well as risky. When you fall behind on an auto title loan that typically charges 300 percent annual interest, you can lose your car even though you might have paid far more than you borrowed.

Of the 16 states that permit high-interest auto loans, Illinois is the only state where there is no limit on the interest rates lenders can charge, and it is the only state without a single consumer protection linked to auto title loans, according to the Woodstock Institute, a Chicago-based community think tank.

Title loan companies said they are providing a service to people in need, but some consumer advocates said they can operate too aggressively. "In Illinois, auto title loans are absolutely unregulated, and that creates a cowboy mentality. They think they can get away with anything, and often they do," said Alon Alop, a lawyer with the Legal Assistance Foundation of Metropolitan Chicago."