6 Car Title Loan Management Tips for Easy PaymentsSteve Driz
Using your car as a collateral to get a loan is sometimes the best option you have. A car title loan can be your savior when you need money urgently. But just like any other loan, payment can be easier and faster if you follow the right loan management tips.
Have you taken a car title loan or are thinking about getting one? Here’re six ways to help you manage and pay your loan without suffering financial distress.
Round Up Your Payment Amount
You should round up your scheduled payments to the nearest $10, $20, $50, or even more. It’s a subtle way of paying more without feeling like you’re paying extra. If you were to pay $215, you can decide to pay $250, which is an extra $35 per month.
After 12 months, you’ll have paid $420 more, which is almost two additional payments. It means every year you’ll be knocking almost two months’ payment off your payment duration. You end up finishing paying your car title loan earlier than expected and free yourself from debt.
With that motivation, you don’t have to stick to one payment roundup. You can keep on bumping up your payment to a bigger number, which will translate to a significant cut down on interest and earlier loan repayment. Since after a predetermined amount of time, typically six months, there’s no penalty for paying your loans earlier, there’s no need to wait for the entire loan duration to finish up payment.
Avoid Missing Payments
Missing a payment is one of the biggest mistakes to avoid while paying your loans. It’s going to hurt you financially. It makes you fall behind on your scheduled payments, can subject you to penalties, and you’ll be paying more if the loan is extended because of any missed payments.
The more you default, the more you may sink your credit score to the point it will be difficult to access loans from most lenders in the future.
If you are on the verge of missing your payment, consider cutting down on other monthly expenses such as eating out, fuel, and entertainment to save the situation until you get back on your feet. Also, most title loan lenders are reasonable and will move a payment if you call and ask.
Pay More Often
Instead of the monthly payment schedule, you can split the monthly payment and make payments every two weeks or even weekly. For example, if you’re paying $200 every month, you can instead, pay $100 every two weeks, or $50 every week.
If you pay $200 monthly, in a year you would have paid $2400. But if you pay $50 weekly, by the end of the year (after 52 weeks), you would’ve paid $2600, which is $200 extra every year. And you’ll be saving on interest and paying your loans in a shorter time, without much struggle.
Therefore, arrange with your lender or enquire about the possibility of paying your loans weekly or biweekly.
Make One Extra Payment
Sometimes you don’t have the money to commit to a weekly or biweekly payments. That shouldn’t worry you. You can make one extra payment every year and still get the same results.
You can save some money equivalent to or more than your monthly payment and pay it off at the end of the year. If you pay $250 monthly, you can look for an extra $250 or more and pay it in any month or at the end of the year. Use your bonuses from work, tips, or tax refunds for the payment.
The advantage of this method is that you have a whole year to look for the extra amount to pay. It’s favorable even to those who are struggling financially. Again, don’t limit yourself to one extra payment.
You can make several extra payments in a year if you have the opportunity to do so.
Get an Extra Source of Income
If you can find a way of making more money than you already have, it will get easier to pay your loans. Use the extra income as an extra payment to your car title loans. If you make $30 monthly in your side hustle, that’s an extra $360 of your loan payment every year.
Again, in the event of an emergency, the extra income can come in handy as you would use it to repay your car title loan. The extra income will save you from defaulting in times when you’re financially down.
With the additional source of income, you can combine all the above-listed methods to not only pay lower interests but also complete your car loan repayment earlier.
There’re many ways of making the extra income: you can rent your car, use it as a cab, sell DIY crafts, take up online jobs, supply products, and much more.
Refinance and Renegotiate With Your Lender
Car refinancing is where you revise the payment rates, payment schedule, and terms of the previous credit agreement. It involves the reevaluation of your credit terms and credit status. If you succeed, you’ll be paying less interest in your subsequent loan repayments.
Thus, it creates a pathway to repay your loan faster. Refinancing is a good option if your new interest rates are lower than the current interest rates and the total saving amount outweighs the refinancing costs.
When you’re in deep financial trouble and paying the current title loan becomes difficult, you can consider getting help from your lender to ease the repayment. Your lender may understand your situation and renegotiate a new deal that can work for you.
Rather than defaulting your car title loan repayment and facing the consequences, discuss with your lender on the way forward.
Why You Should Pay Your Car Title Loan on Time
Apart from saving on interests and reducing the overall term of the loan, you will save a lot of money in the long run if you pay the loan faster. There’re many things you can do with the savings. These include:
- Start a new business
- Boost your existing business
- Save for your retirement
- Repay other debts
- Cater to the household or personal needs
- Travel or pick up a hobby
What’s more, you’ll save yourself from the stress and anxiety that comes with paying loans and defaulting due to unforeseen circumstances.
Are You Looking for a Car Title Loan?
Coming up with a title loan management strategy enables you to repay loans fast, on time, and with favourable interest rates.
Are you looking for a car title loan? You don’t have to be employed or have a high credit rating to get one. Contact us today for a fast and secure car title loan.