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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florida. ...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Oct 3, 2012

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In Kansas City, Mo, a $2,500 car title loan may end up costing a man more than $20,000. This car title loan allegedly had interest rates akin to a payday loan in the triple digits. James Miller, a man battling stage four liver cancer, took out a car title loan in order to help a family member but the loan carried an annual percentage rate (APR) of 276 percent.

After he put his 2012 Dodge Avenger up as collateral, Miller described his decision to Fox local news as having been made, “Foolishly. Foolishly. Foolishly.”

In a car title loan, the ownership title of a vehicle is offered up as collateral. After evaluating a vehicle’s worth, a lender will offer a borrower money. In the event that the borrower is unable to make payments, the lender can then repossess the car in an effort to reclaim their lost money. These loans are easy to qualify for since lenders face less risk due the collateralized vehicle.

Miller however, feels he didn’t fully understand the repercussions of his decision.

“I didn’t sit down and really discuss my options… that was on me. I didn’t really sit down and focus on what needed to be done because I was looking at my family first,” he told Fox local news.

The family member that Miller was looking out for was a cousin that was also dying of cancer.

Even though Miller didn’t discuss his options, he did recall that the finance company issued him a warning.

“She said, ‘Well, don’t fall behind’ because, at that time, she said, ‘the interest will get you,’” he said, quoting the representative at the finance company.

Then, just as she warned, the interest did catch up to him.

Miller’s monthly loan payments quickly rose past $1,000.

“It just snowballed. You know, 1,000 dollars a month, oh my goodness. Plus, things that come your way. If you get caught up, you in a bind. You get caught in a bind,” he said.

Miller’s car was eventually repossessed.

“They did it so slick. My wife when out the door, they hollered out the truck, ‘We repossessed.’ He didn’t stop. He didn’t knock on the door,” said Miller.

Unfortunately for Miller his pain goes beyond the loss of a vehicle. Miller cautions anyone considering taking out a car title loan as he now struggles to find transportation to and from his chemotherapy treatment appointments.

“Don’t even get involved,” he said.

According to the consumer advocacy group Communities Creating Opportunity, the car title loan industry is considered to be very lucrative in Missouri due to the state’s fairly liberal restrictions.