From time-to-time, many Alabamans find themselves in a financial crunch. They may have bills coming due and need quick cash to hold them over to their next paycheck. When this happens, many of these individuals turn to car title loans. These loans are supposed to be short term loans which are fast and easy to obtain. But Alabama residents should be aware of the serious risks involved with taking out one of these loans.
While the economy continues its slow slog towards recovery, banks and consumers are struggling. As the auto lender market has thinned, banks have continued to lower credit requirements for borrowers. This has led to an increase in the subprime auto loan market, similar to the one that wrecked the housing market during the last recession. According to reports, 36 percent of auto loans issued in the second quarter were made to subprime borrowers. Consumers should be wary as these loans may carry higher interest rates that make repayment difficult.
There are certain things in life that individuals need. Adequate food and housing are amongst these needs, yet, for many, a car is also a necessity. Without a vehicle, many Alabamans would be unable to get to work, which in turn would lead to severe economic hardship. Also, an individual's personal life might suffer if they are unable to attend weddings, funerals, and other family functions. With important aspects of life at risk, it is understandable why some individuals would be especially protective of their vehicle.
There is good news and bad news in the realm of car loans for borrowers in Alabama. The good news is auto loan delinquencies are down to 2.38 percent, which is the lowest delinquency rate for a second quarter since 2006. However, the bad news is banks are increasing the number of loans they are making to subprime borrowers. Banks increased their subprime loan percentage from 34 percent to 36 percent.
Many Americans have fallen on hard times. For many, Income has dropped, unemployment has left them without wages, and health and other personal issues have left them facing seemingly insurmountable financial challenges. With little or no money, these individuals may have creditors harassing them over missed payments, and depression and hopelessness may settle over them. For some individuals, this may lead to drastic measures.
With the economy still struggling to recover, many Alabamans have found themselves facing financial challenges. A change in income or unemployment can leave these individuals in a bind for money, and may lead them to take drastic measures. While some of these measures are viable options to help these individuals get back on their feet, others are more likely to drive the individual deeper into financial trouble.
Nowadays, most people need a car. Whether it is to get to work, school or to visit family, many people live too far away from public transportation to utilize it or feel that owning a vehicle is simply more efficient. With the high price of cars, a lot of these individuals take out an auto loan to cover the purchase price. Most of the time, the payments are made on time and all is well. But when a person has a string of missed payments the threat of repossession can be enough to push them over the edge.
For many, owning a car is the only way to get to work, school and to see family. When unforeseen changes come about, whether from sudden unemployment or unexpected medical bills, paying for that vehicle can become difficult. Late or missed payments may result in financial challenges that may feel like they are impossible to escape. Additionally, an individual may face wage garnishment or repossession. Unfortunately, this is the case more and more frequently across America.