You’ve run into a small emergency – car transmission has failed, the roof needs fixing, AC seized and died, anything – that requires a little more money than you have. So naturally, you turn to the ever-reliable providers of title loans here in Salt Lake City, hoping to pay off the loan with your next paycheck.
Problem solved. Or so you thought. Before you can repay the loan another emergency strikes, forcing you to divert some to the money and not clear the loan. And so, it rolls over to a new month, accruing more interest. That’s when it hits you that you’re in over your head.
What going on here?
If you find yourself unable to service your debts, it’s an indication that you need to improve your money handling skills. Having a title loan rollover on too many times can end up burying you in a pile of debt. You have to act swiftly to keep this situation from compounding.
Naturally, people tend to borrow money when they are faced with a situation that is out of their control. However, you don’t have to make this a way of life. The thing with loans, especially the short term one, is that they carry a high-interest rate. As a rule of thumb, you should never hold on to them for a long time.
If you do, then the total amount of money payable as interest becomes way more than the principal amount. Short term loans don’t take your financial history into account. Instead, they compensate this by asking for some sort of security and high-interest rate.
Every time you miss the deadline, it begins afresh as a new loan – now the amount you owe includes the principal and the accrued interest.
What can you do?
If you find that your bills are overrunning your life, that’s a clear indication that your income isn’t up to snuff. As such, your first order of business would be to find ways to shore up your income. That’s the most efficient way to head off the piling debt.
In his book, The Total Money Makeover, financial expert Davy Ramsey highlights instances of people who went from drowning in debt to achieving financial independence. Most of these people found success by taking up extra shifts at work or by getting another job. You too can borrow a leaf from them and follow in their footsteps.
Don’t shy away from a job if it poses no threat to your health and wellbeing as long as the money is good. Some of the job opportunities might be a little unsettling, but don’t let that faze you. Keep your eyes on the prize and work your way to being debt-free.
You need to come up with a radical plan to improve your financial situation if you find that you continually have title loans rollover. The high-interest rates on such short-term loans can leave you buried under a growing pile of debt. Growing your income is one of the efficient ways to head off such a problem.
You need to throw all the extra dollars at the debt until it’s cleared off and you’re free of debt.
