With the housing market bubble burst of recent years, there is a growing demand to up the requirements on granting loans. The high rate of foreclosures that currently exist have made many hesitant about a situation that could create a second bubble burst in the near future. But as the government struggles with regulation, they are, in reality, doing consumers a greater disservice. See, the title loan is not a highly speculative loan like some of the housing loans were. They are loans that do not exceed the amount of the collateral. In other words, they are secured, because the person taking out the loan must present collateral that is of equal or greater value than the loan amount before he can be granted it. But in essence, these secure loans are being treated as risky and highly speculative.
What is actually happening is that the government, spooked over the housing catastrophe, has seen overregulation as a tool to control people and take away the freedom of personal responsibility. Title loans generally come with a higher interest rates and are seen as riskier than other loans, falsely so. The individual usually uses the car title as their collateral, and the loan amount that they are eligible for is directly tied to that collateral. Should they default on the loan, the person issuing the loan will be assured their monies by being able to collect the collateral as their own.
Yet, 2009 saw a number of unneeded regulations that put many individuals, who were already struggling in even greater financial turmoil. By making it harder for financially needy people to get loans, you are essentially catering the market to those, who don’t really need the loans to begin with. Meanwhile, the people, who would actually benefit from the loan, suffer because they don’t have the money or the financial standing to get decent interest rates or an agreement of any kind.
Governmental handholding such as this essentially turns people, who would be self service individuals into people, who end up depending on the government. When a person does not have the option of being able to obtain a loan, he is forced to do without key necessities or take a handout from the government.
Title loans will continue to be subject to regulation in the post housing crisis economy. But the idea that they should be is another story altogether. These are not highly speculative loans in which the individual has no means to ever pay back the full amount. These loans are guaranteed for repayment, yet it is getting harder and harder for people to actually attain them. If you want to know more about how a title loan can work for you, then it’s important to match yourself with the right title loan company.