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About to take a title loan against my car

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LRobTed
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About to take a title loan against my car  Reply with quote  

I'm in quite the bind as I have taken out five payday advances against my social security check and each month find myself in "catchup" mode. I am getting desperate and found a place that will lend me $2,500 for $360 per month for 12 months and no penalty on pre-payoff (or so they say). Right now my social security check is $1500 but the payday loans only net me $1275. I am dealthy afraid to default on these pay advances as they all tell me I "have" to pay them right back and so I do. I have many outstanding bills but I have to run around and pay off these people to turn around and get another advance from them. If I get $2,500 upfront I can get out from under them but then people tell me this is an awful lot of money to pay per month for $2,500. Any advice for me will be greatly appreciated. The place I'm looking into is a check advance place but fairly reputable. I am horrible at finances and would surely need some advice here. My car is a 2004 Hyundai Sonata in excellent condition with $139,000 miles on it. The lending place say they don't care that my credit is bad (and it is).
Post Thu Jun 27, 2013 2:39 pm
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coaster
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30 seconds of research on Google brought up the following information:

in California, there is no legal limit on the annual percentage rate for car title loans of $2500 and over. Interesting, the amount they want to lend, no?

The APR on the title loan you're contemplating is 72.8 percent.

You call these people reputable. I call them criminals.

Sorry. I hope someone has something constructive to offer. Declaring backruptcy may be the only way out for you. But you have to get out of this cycle of borrowing to pay off debt.

You might find some help in this non-profit organization: www.nfcc.org

Good luck ....

~Tim~
Post Thu Jun 27, 2013 2:56 pm
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oldguy
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quote:
I am getting desperate and found a place that will lend me $2,500 for $360 per month for 12 months


$360 x 12 = $4320 per year. You said that "but then people tell me this is an awful lot of money to pay per month for $2,500". I'm surprised that you need 'people' to tell you that?

Two questions -
1. LA is one of the most expensive places in the country for a retiree, are you tied to that location? (There are 100s of towns in the Midwest where your $1500 SS check would go much farther).

2. Why not sell the car? Do you need that expense - public transportation is cheaper.
Post Thu Jun 27, 2013 3:28 pm
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clydewolf
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Re: About to take a title loan against my car  Reply with quote  

quote:
Originally posted by LRobTed
I'm in quite the bind as I have taken out five payday advances against my social security check and each month find myself in "catchup" mode. I am getting desperate and found a place that will lend me $2,500 for $360 per month for 12 months and no penalty on pre-payoff (or so they say). Right now my social security check is $1500 but the payday loans only net me $1275. I am dealthy afraid to default on these pay advances as they all tell me I "have" to pay them right back and so I do. I have many outstanding bills but I have to run around and pay off these people to turn around and get another advance from them. If I get $2,500 upfront I can get out from under them but then people tell me this is an awful lot of money to pay per month for $2,500. Any advice for me will be greatly appreciated. The place I'm looking into is a check advance place but fairly reputable. I am horrible at finances and would surely need some advice here. My car is a 2004 Hyundai Sonata in excellent condition with $139,000 miles on it. The lending place say they don't care that my credit is bad (and it is).

You need more income to get out of this.
Why not get a job to supplement your SS income?

I like the idea of selling the car. If you can use the car for $2,500 collateral loan, you could probably sell it for $5,000 and have no monthly payment.
The amount you save in car insurance, and other expenses would easily pay for your public transportation costs.
Post Fri Jun 28, 2013 11:36 pm
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LRobTed
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Update on taking car title loan  Reply with quote  

First, I can't "sell" my vehicle because I need it to get around and my husband uses it at times too since his own car has got almost 250,000 miles on it and he can't afford a used car now either. Second, every month I can't pay some bills I'm hurting my credit score. And every month when I get my social security check I have to run around to five different payday places to pay them off, only to get back $255 on the $300 I pay them each month. But it keeps me going but it is wearing on me and I can't take it much more. If I get this loan, yes I will be paying about $2,000 over what I'm borrowing. I understand to most sane people that is truly insanity but it will enable me to get "rid" of running around to these places. I'd take the first $1500 and go pay them all off and never see them again. The remaining $1,000 I can use to catch up on bills and only deal with the $360 per month payment. I could even start to "Bank" some of my social security check and put it aside to try and pay this loan off earlier than a year. This place I'm dealing with claims no charges to pay it off early although I have to pay the full amount I signed up to pay back. Do any of you get why IM' doing this???? For my mental health reason I Just want to stop running around every month. I want my FULL social security check deposited; the loan for $360 will automatically be deducted and I will have the remaining check for MYSELF each month.
Post Wed Jul 03, 2013 5:57 pm
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blixet
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A single payment of $4320 at the end of a 12 mo. period would yield a 73% interest rate, but by making the $360 monthly payments the annual rate jumps to 115%. Shocked

I guess I don't understand your statement that the payday loans net you $1275 per month. If you could pay off the payday loans with $1500 from the car loan, and your SS check is $1500... something isn't adding up for me. Sorry for being so dense.

Information is more valuable sold than used – Fischer Black
Post Wed Jul 03, 2013 9:12 pm
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oldguy
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quote:
First, I can't "sell" my vehicle because I need it to get around and my husband uses it at times too since his own car has got almost 250,000 miles on it and he can't afford a used car now either. Second, every month I can't pay some bills I'm hurting my credit score.


Just my opinion - but it sounds foolish to keep two cars when you are flat broke. You're retired - why keep an extra car? Become a one-car family, pay off the laons, and then the $1500 SS check will provide a livelihood for you. Does DH also get an SS check?

And why do you live in LA? That is a very high cost of living region, your $1500 SS check will go a lot farther in most other parts of the country.
Post Wed Jul 03, 2013 9:24 pm
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LRobTed
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Need both cars  Reply with quote  

Ok, first we handle finances totally separately. He is not old enough to retire and he needs his car to commute 60 miles per day to his job. He uses "my" car (the one I want to get car loan) because "his" car has just about run its course, is not reliable and so many miles on his car would not sell for beans. My car is worth the $2500 I want to get cash on it for (but actually amounts to $4,000 with the loan I want to make). We cannot leave Los Angeles because his house of 30 years will be PAID OFF in two years. To leave now would be impossible and foolish because he has a good job here (after being laid off over two years) and again, this ROOF over our heads will be paid off. But it is HIS house, not mine. We are not really legally married anway - just lived together for ten years, no common law in California. But that's not my issue. I need cash now and I also need this car now so I can't sell it. My significant other (or husband, not legally) refuses to buy another car because he himself is in debt due to both of us being laid off during "the crash" of 08,09. So this is what I'm prompted to do. As stupid as it sounds, just to get out from paying these places off every month will restore some sanity for me.
Post Wed Jul 03, 2013 11:09 pm
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oldguy
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Your husband has a job, why not borrow the $1500 from him and pay off the 5 PayDay loans? That way you get your full $1500/m SS check. And then give him $300/m for 5 months - and you'll be free!


quote:
We cannot leave Los Angeles because his house of 30 years will be PAID OFF in two years. To leave now would be impossible and foolish because he has a good job here (after being laid off over two years)


But this part sounds crazy - you are very 'house poor' - neither of you has any money but you are sitting in a valuable asset (a house in LA). Most people would sell the house ($500,000?), move to almost anywhere else in the USA (where houses cost only $100,000), and get a new house and a new job for husband. Very Happy
Post Thu Jul 04, 2013 12:38 am
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littleroc02us
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First of all, what do you need a credit score in your predicament? Borrowing more money is the worse thing you can do. It's time to stop the cycle and stop borrowing money. What I would do is stop making payments to the paday lender. In the meantime start saving up money that will help you settle with the collectors once your sued which could take up to a year. If you don't do this the 72% interest payments your making will eventually bankrupt you.

Risk comes from not knowing what you're doing. (Warren Buffet)
Post Thu Jul 04, 2013 3:27 am
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coaster
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Re: Need both cars  Reply with quote  

quote:
Originally posted by LRobTed
just to get out from paying these places off every month will restore some sanity for me.

Yes, but to get out from paying off the other places you will have to pay off one place almost twice what you borrowed. Now that truly is financial insanity.

If this is something you truly are going to do anyway, regardless of all advice to the contrary, then try borrowing $2450 instead of $2500. Why? Because under $2500 in California the interest rate is capped at 28%. $2450 versus $2500 won't make a bit of difference in what you want to do.

But how much you want to bet that they won't be interested in lending you anything under $2500? That ought to tell you something ....

They're predators and you're the prey. Sorry, but that's the truth.

~Tim~
Post Thu Jul 04, 2013 5:50 am
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LRobTed
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follow up on taking car title loan for $2500  Reply with quote  

First of all, whoever posted about attempting to take out $2450 vs. the $2500 was absolutely correct. The payday people WON'T even consider it. So you were right about that.

To answer the other post about feeling "dense" about my social security earnings, etc. I have bills to cover every month. So I run around paying off these people (5 payday loans at $300 equals what my social security check is, $1500). I pay them each the $300 and then "redo" the loan to get money back in my checking account so each loan once I "re-up" it, gives me net $1275 each month ($255 x 5). Out of that $1275 I have BILLS that even exceed that amount so I pay what I can!! If I took out the car title loan I would be paying approx. $100 more each month to them, but would stop all the five loans. IF I were to go get that loan tomorrow, I would have $2500 in hand to go around, pay off these people and then every month my social security check would be "my own" again minus the ONE car title loan. Plus I'd have the extra $1500 coming up next week to pay off some bills and then if I can SAVE at least $700 per month, putting it aside, I can possibly repay the car title loan in six or seven months. It WILL cost me over $4K to borrow the $2500 but do you see my logic? Essentially I would have the $1500 coming up plus $1,000 left over after I pay off the five $300 loans, so in pocket after getting car title loan I'd have $2,500 to pay off bills and "breathe". I hope somebody gets this and understands. I'm going to do this tomorrow (Monday) unless somebody can explain a better way to me. I sincerely honestly appreciate feedback and constructive criticism. Confused
Post Sun Jul 14, 2013 1:38 pm
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oldguy
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quote:
I'd have $2,500 to pay off bills and "breathe". I hope somebody gets this and understands.


lol - we get it! You want an esay answer.
I'm retired, wealthy, and I understand money. And I will tell you that you cannot get out of debt by borrowing more shortterm, high interest money. You can 'breath" for another month - then it comes back even worse. You need to actually pay these loans down, not just move them around. Lower your standard of living (smaller house? ), sell something to raise capital (extra car?).
Post Sun Jul 14, 2013 4:07 pm
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LRobTed
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Ok, I understand that you are older and wiser with your money. I was not. I don't understand why you think this would bring around more heartache when I could pay off MOST of my bills, get rid of the five people at these payday places I visit every month and I would ONLY have this $360 car title loan plus minimal living expenses. I don't have ANY assets (I'm 63); I have "no extra car" to sell in fact, this "car" I am thinking about financing is my only asset in this world. The only worry I would have is if this car is totaled in an accident, I still have to pay this off no matter what as they would hold title until I paid them back. I live with my significant other, I pay no rent or food, all I pay for is the utility bill. So if I get this loan and pay just about everything off, I can "bank" $900 a month for five months and walk over there and pay them back sooner than later. At end of five months I will be out of debt and get my car back. I cannot possibly get out of this "Loop" I'm with the five payday loans. My bills total $3,000!! I HAVE to pay them monthly!! Maybe you don't quite get the predicament I am in because you have money.
Post Sun Jul 14, 2013 4:43 pm
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coaster
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What seems to be missing from your math, your analysis, your net amount, and what I can't find anywhere in this discussion, is what your other fixed monthly expenses are. They have to be included in your cash flow analysis. It's not as simple or as easy as you've described because you've apparently left out relevant details that are going to affect the outcome. The monthly amount you have to pay on the other bills has to be subtracted and also any other amounts that you're contributing to the operation of the household. I can't see that you've accounted for that. Or did I miss that somewhere?

You're sweating now to pay off the payday people; with the car title people holding your title you'll be sweating for 12 months should something happen to an asset you've pledged and is under your responsibility but doesn't really belong to you. I just still don't think you're seeing the whole picture.

But.... we don't even have to know that. Assuming nothing else changes, we only have to consider the one change that comes from paying off the payday people with the loan from the title people. Currently you're floating five payday loans where you get $255 for a cost of $300, or a net of $45 per month per loan. That's a monthly cost of $225. If you pay those off with the proceeds of the title loan, the title loan costs you $360 a month for a $2500 loan; divided by 12 that's $208 a month. Making your monthly cost $360 - $208 = $152 (rounded). So, yes, you are ahead by doing what you plan, but only by $73 when figured on a monthly cash flow basis. Is that $73 gain going to pay for 12 months of anxiety over someone holding your car's title? That's for you to decide.

Seems to me a simpler way out of this is to squeeze somewhere and each month for five months in a row you refinance one less payday loan. The first month is the hardest because you have to squeeze $255 from somewhere else in your budget. The next month is easier because you have $45 less financing cost than the previous month. And so on for the remaining months until you're free and clear of the payday people.

~Tim~


Last edited by coaster on Sun Jul 14, 2013 5:26 pm; edited 1 time in total
Post Sun Jul 14, 2013 4:56 pm
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