Why Are the Interest Rates So High on Car Title Loans?
We are often asked why interest rates are so high when it comes to car title loans. It isn’t because car title loan companies have bad intentions in mind. There are 4 main reasons why interest rates get so high:
1). High risk loans – this is determined by several factors.
2). Little to no documentation needed for these loans – when very little documentation is required the loan companies are taking a lot of risk.
3). No credit check is required – again the risk is on the loan company.
4). In this particular industry there is a higher rate of default and as a result, the rate to the general borrower is higher.
Ways to Get Better Interest Rates at Lighthouse Financial
We do attempt to give lower rates for our clients that come back for additional loans and at times we offer interest free loans for repeat clients in good standing. If you are interested in a car title loan we are here to help you.