Faith Morrow
OneMain Financial offers personal loans for debt consolidation, home improvements, or unexpected expenses. The company provides unsecured and secured personal loans and auto loans in 44 states. However, some customers have reported negative experiences with taking out title loans from OneMain Financial, citing issues with unexpectedly high-interest rates and delays in releasing titles even after loan repayment. Title loans, also known as car title loans, are considered a risky option due to their short-term, high-interest nature, often resulting in significant risks and high costs for borrowers.
| Characteristics | Values |
|---|---|
| Title Loan | A risky option, short-term, high-interest loan with a high annual percentage rate (APR) |
| Loan Amount | $500 to $1,000 |
| APR | Upwards of 300% |
| Collateral | Your car title |
| Loan Availability | Available in 44 states |
| Loan Exclusions | AK, AR, CT, DC, MA, RI, VT, and U.S. territories |
| Loan Uses | Cannot be used for business or commercial purposes, purchasing crypto assets, securities, derivatives, or other speculative investments, gambling, illegal purposes, or post-secondary educational expenses |
| Funding Options | Debit card, direct deposit (ACH), or check |
| Funding Time | As soon as an hour after signing loan documents to 1-2 banking days |
What You'll Learn
OneMain Financial offers personal loans
Personal loans from OneMain Financial can be a good alternative to title loans, which are considered a risky option due to their high interest rates and short repayment periods. Title loans typically have an annual percentage rate (APR) upwards of 300%, making them difficult to repay. On the other hand, personal loans from banks, credit unions, or online lenders often have lower interest rates and more favourable terms.
When applying for a personal loan with OneMain Financial, you can choose to receive your funds through a debit card, direct deposit (ACH), or check. If you opt for a debit card, you can access your funds as soon as an hour after signing the loan documents. Direct deposits are usually available within 1-2 banking days, and a check can be issued on the same day as the closing. However, the timing may vary based on factors such as the number of documents required and the collateral involved.
It's worth mentioning that OneMain Financial charges various fees associated with their personal loans. These fees include late payment fees, returned payment fees, and lienholder fees when adding OneMain as a lienholder on collateral. It's important to carefully review the loan terms and conditions before making any decisions.
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Title loans are a risky option
The high costs and short repayment periods of title loans can lead to a cycle of debt. According to the CFPB, a vast majority of single-payment loan borrowers renew their car title loans multiple times, incurring fees each time. For a $1,000 loan, that would mean at least $1,750 in fees alone. The lender can simply repossess your car to satisfy the debt, without sending you to collections.
There are several alternatives to title loans that are less risky and have more favourable terms. These include personal loans from banks, credit unions, or online lenders, credit card cash advances, employer-based loans, and borrowing from family or friends. If you are struggling with debt, it is important to seek advice and consider alternatives before committing to a title loan with dangerously unfavourable terms.
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Title loans are a form of predatory lending
OneMain Financial offers secured and unsecured personal loans and auto loans in 44 states. However, it is unclear whether the company offers title loans. Title loans, also known as car title loans, are a risky option for borrowers. They are generally considered a form of predatory lending, designed to take advantage of people in desperate situations.
The lenders do not check the borrower's credit score, and the loan does not impact their credit. This can be appealing to those with low incomes or poor credit ratings, who are often unable to obtain other forms of financing. However, title loans often have unclear terms, targeting those with low incomes and low credit. They may also come with additional fees, such as illegal junk fees related to property retrieval and vehicle repossession, which can significantly increase the loan cost.
To avoid the risks associated with title loans, it is recommended to explore other sources of funding, such as personal loans from banks or credit unions, which often have lower interest rates and more favourable terms. It is also suggested to consider cutting costs, selling unused items, or taking on a side hustle or gig job to increase income.
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Title loans have high interest rates
OneMain Financial does not appear to offer title loans. However, it does offer secured and unsecured personal loans and auto loans in 44 states.
The Federal Trade Commission (FTC) states that the average fee for a title loan is 25%, which is an annual percentage rate (APR) of about 300%. This can be very costly, even when borrowing a small amount of money. For example, if you take out a car title loan for $500 with a finance fee of 25%, you will need to pay back $625.
To get a low-interest title loan, you will typically need a strong financial history to demonstrate your high creditworthiness. If you have a low credit score, you can take steps to manage your debt and raise your credit score, such as lowering your credit utilization.
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Title loans are for a short period
OneMain Financial offers personal loans for bill consolidation, home improvements, or unexpected expenses. They do not offer title loans.
Before taking out a title loan, consider other options such as personal loans from banks, credit unions, or online lenders, which often have lower interest rates and more favorable terms. Credit card cash advances, while still costly, may also be a more favorable option than title loans.
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Frequently asked questions
A title loan, also known as a car title loan, pink-slip loan, fast auto loan, or title pawn, is a loan that uses your car title as collateral. It is a short-term, high-interest loan, typically for a small amount of money that has a high annual percentage rate (APR) making it difficult to pay back.
OneMain Financial offers personal loans of up to $20,000 with fixed rates and payments. They also offer secured and unsecured personal loans and auto loans in 44 states. While they do not explicitly state that they offer title loans, they do mention that secured loans require collateral, such as a vehicle, which is the case with title loans.
Title loans are considered a risky and poor financial decision due to their high interest rates, short repayment terms, and potential for predatory lending practices. The high APR and short-term nature of these loans can make them difficult to repay, leading to a cycle of debt.
Alternatives to title loans include personal loans from banks, credit unions, or online lenders, which often have lower interest rates and more favourable terms. Personal loans from OneMain Financial can help consolidate debt or fund a major purchase, offering a potentially better option than a title loan.
