4. Title Loans

Similar to the pawnshop and payday loans, title loans are small and short-term loans, but the only difference is that this type of loan is based on your vehicle. As you will provide a security, the lenders are not going to cross check your credit history, so you may feel it’s a convenient option to borrow such loan. But don’t tend to evaluate the fact that your car is much more expensive to sway it as a security for a lump sum amount of 10,000 or 20,000. In case you default on it, you may lose your car which is just awful. So try not to consider such loans.

5. Buy-Here-Pay-Here Car Dealerships

Buy Here Pay Here is a method of running an automobile dealership in which dealers themselves extend credit to purchasers of automobiles. Usually, purchasers of cars at buy here pay here dealerships have poor credit history, and loans have high interest rates. These lenders often commence the sales process by looking not at cars, but your income and credit that is they will lend only when they learn what you can afford. Usually they charge 24 percent rate of interest which is 3 to 4 times more than the typical used car loand. The bottom line is these lenders are into the business of collecting lot of interest which is just too bad for you pocket.

Also Read: 10 Money Facts Your Parents Forgot To Teach You