The high risk auto loan is an expensive option

The high risk auto loan is designed by lenders for low-income consumers who are often in-eligible for traditional auto loans. The high risk auto loan companies require your vehicle title be placed as collateral until the loan is paid off.

According to a recent survey in the state of Florida, 12 million Americans cannot afford a bank account and so high risk auto loan companies are often the only place for them to turn if they are in need of an emergency loan. The survey also found that the interest rates being charged for auto title loans range from 264% to 273% APR. where 30% APR should have been sufficient.

Title loan companies claim that these interest rates are required because they are lending cash to a "high risk" clientele. High risk auto loan is sometimes the only option available to people with a less than stellar credit rating. But where's the risk, when the lender automatically takes ownership of a much higher valued vehicle than the amount of the loan as you can only get 20% of the equity in your car based on its current market value.

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About The Author:

Ego Feathers Jr. is a successful author and publisher of http://www.1st-choice-loans.com. Recommendations and tips on auto loan inquiries including interest rates, bad credit loans, new and used vehicle loans and refinance options.