Across the country, consumers pledge their car titles as collateral for short-term loans with high interest rates. The industry, which often reaches the same people denied credit by traditional banks, insists it provides a valuable service. But consumer advocates say the loans are often predatory and can trap borrowers in cycles of debt. And if they default, the borrower risks losing their vehicle.Source:birminghamtitleloanpro.com/

For many borrowers, it can take months or even years to pay off their loan. A survey conducted by the Consumer Financial Protection Bureau found that, on average, title pawn borrowers spend more than $25,000 to pay off a loan. Many states limit how many times a loan can be renewed or require that the principal be paid down as a condition of renewal. But Georgia has no such restrictions. In fact, its title pawn contracts allow triple-digit annual percentage rates and exempt lenders from usury laws that apply to payday and other subprime lenders.

Making Informed Decisions: Title Loans in Birmingham, AL

Title pawn shops, such as the one located at 9900 Parkway East in Birmingham, offer fast cash to customers with few underwriting requirements. All you need is a vehicle, photo ID and the lien-free title to your vehicle. The amount of the loan depends on the value of your vehicle. In some cases, borrowers may be able to borrow up to $15,000, depending on the state in which they live. Some companies also offer “title loan buyouts,” in which they will pay off your existing title loan with a new one, but this does not necessarily wipe out the original debt or reduce the interest rate you owe.