Auto Title Loans And Rent-To-Own Centers: What's Better?

Auto title loan lenders and rent-to-own centers may have seen an upsurge in business with the Baltimore Ravens facing off against the San Francisco 49ers in the year's biggest football game. One out of every two households in America is said to have watched Superbowl XLVII, rooting on their team with painted faces and a plate full of food. An estimated 7.5 million fans went out and purchased new TV's specifically to watch the game. With the average price of a big screen TV costing anywhere from $500-$3500, consumers whose cash flow didn't support their spending had to get creative with their purchasing options.

Some may have chosen to take out an auto title loan based on the value and equity of their car or truck. With lenders offering up to $5000, there's plenty of wiggle room to purchase that flat-screen or Plasma. It' a hefty price to pay, though, if the borrower can't repay the loan with their next paycheck, or within the 1-3 month time period that the lenders give to repay. Borrowing $1000 will cost around $200 in loan fees not to mention paying high interest rates should the loan be "rolled-over" due to the debtor's inability to make their payments. That is if it's paid back right away. It more time is needed, fees and interest alone could surpass the original amount of the loan. If the borrower can pay back quickly, the hit to their wallet may not be as devastating. If the borrower goes into default, the auto title lender can go as far as repossessing the car.

Those who don't want to hand over the title to their automobile in the midst of football fever may have taken the rent-to-own road, giving them the option to make payments on their newly acquired game gadget. That same $1000 TV could end up costing thousands, though, should the renter get stuck in a cycle of "buying-over-time".

So what is the best way to go when wanting to make a large purchase? An auto title loan that potentially puts your car at risk of being repossessed or renting-own-own which could send you into payment pandemonium? Either way, you may be setting yourself up for a financial dilemma if you can't afford to make payments on your newly acquired merchandise.

Be sure to consider the pro's and cons of both before you make a commitment. If you rent-to-own your TV you will make monthly payments that may be more suitable to your budget but in the long run could wreak havoc on your bank account. You will eventually own the TV outright and won't have to worry about your credit score when applying because rent-to-own stores typically loan to anyone. On the flip side, it could take years to pay off that TV which means you could end up spending three times as much as the TV is worth. Not to mention, if you default on your payments, the store has the option to take back your TV.

If you choose to utilize an auto title lender to get the cash you need in order to go out and purchase the TV, you won't have to worry about your credit history being a factor in the approval process. Title lenders don't require a credit check. You will get the cash overnight in most cases and will own the TV outright once it's purchased. The risky part comes if you can't pay back your loan when the lender requires. In most cases you will have one-three months to make good on your loan but if you default, the lender has the right to repossess your car. That's a hefty price to pay for watching your beloved team try to reach #1 NFL status.

In either case, you may be taking too much of a risk just to have that larger than life viewing device. When it comes time to make a large purchase, take a good look at your budget and consider whether or not you are in the position to not only borrow, but to repay. The long term consequences of your short-term desires could come back to tackle you and your wallet.

Source: http://joe-holbrook.blogspot.com/2013/02/auto-title-loans-and-rent-to-own.html

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