Recently, I was warming up on a putting green when I overheard a golf buddy talking to a friend. He said his son had just hit him up for some more cash and that he’d responded by telling his son to get a car title loan.
I had to interrupt and tell him about the outrageous interest charged on car title loans. He was stunned when I told him the annual interest rates plus fees, renewal charges, etc., can top 300 percent by law.
I advised him to get his son to open a credit union account and then ask about a loan. The story had a happy ending.
But many of these stories don’t end well. It may sound OK at first when you hear the interest is only 25 percent of what you borrow per month. But on an annual basis, that is 300 percent. Other fees crop up when you cannot pay off the whole amount and you must “extend” the loan. Each loan shop has its own vernacular — loan renewal, loan extension — but they all mean the same thing: You pay more.
When investigating a loan, ask what the interest rate is and whether it is applied weekly, monthly, etc. See what that translates to on an annual basis. Don’t just get one rate; get several and compare. Don’t risk your hard earned money to the unscrupulous.
State President, AARP Alabama