This is going to be more of a “would you?” type of article. I was watching some free over-the-air television on my Mohu Leaf and came across an interesting commercial that made me wonder. Would you finance a college education with a title loan?
What is a title loan?
For those that are unaware of what a title loan is, here is a little breakdown. A title loan is when you offer a lender your car title and allow them to place a lien on your car in exchange for money. You can get a small loan pretty easily, but you can also get thousands depending on your car. You have a payback period depending on your needs, but if you don’t pay, then you could lose your car.
The commercial was on during the late night schedule, but I have seen it more times now that I have taken notice. There was a “real customer” that proclaimed that the said company allowed her to pay for her child’s college education with consistent title loans. This customer was getting title loans in order to pay for your child’s tuition. This means that she was paying for multiple title loans. The interest rates on these title loans are quite high and if you default, then the lender can repossess your car. With the lien that they place on it, they technically become owners of it if you default on your loan repayments.
Not only are you paying high interest charges, but you could lose your car. That would be a bad day to say the least. What is the point of doing this just for a college education? Why would you not just have you child work hard to pay for their own education? Obviously, this customer had some money troubles, so trying to push her child through college might have not been the right answer.
Usually when someone gets a title loan, it is because they have bad credit and can’t qualify for personal loans or even use credit cards. Why this is a bad situation to be in, I don’t think it is the right move to put up your car to borrow money. I know that we all want to help our children, but I will not put myself into financial hardship in order to achieve this goal. My son would have to put on his big boy shoes and get a job if he wanted to go to college. That is just what the reality would be if it were me.
What would you do?
So, I just want to ask if you would finance a college education with a title loan (or multiple)? Would you even take out a title loan if you needed money? Let me hear it!
Photo courtesy of Center for Responsible Lending