Is it Difficult to Pay Off a Car Title Loan?
A car title loan is one of the best ways to secure instant cash when you need it. A lot of people prefer taking auto title loans because:
- They are quick to process
- They are available for people with low credit scores
- No bank statements are required
However, these loans put an encumbrance on your vehicle, and as a result, some people steer away from them. In the worst case scenario, you may wish to sell your vehicle or trade it in on another one and having a Title Loan on it may impede the process.
Although a Title Loan is a saving grace to may people, it does have a few hitches, which is that you cannot do what you want with the vehicle until the loan is paid off.
Nonetheless, this doesnâ€™t have to be the case.
If you are wondering how to pay off a title car loan with ease; you have come to the right place. We have compiled five ways you can get out of an auto title loan.
If youâ€™re interested in finding out how you can pull this off; keep reading.
1. Selling Your Vehicle
Ideally, this is not the best way to repay car title loans especially if your title is not clean. A clean car title is a title that is not indebted anywhere for instance with your lender.
Nonetheless, it is still a viable option to pay off the auto title loan.
Selling your vehicle could get complicated, but can always get worked out. The Title Loan lender can make arrangements with the purchaser or car dealer, but many this could scare off a potential buyer, if they do not understand the process.
If you still need a vehicle, you may have to downgrade to a less expensive car. Hence, when you sell your vehicle, you can pay off your lender and still have some money left to buy a less expensive vehicle.
2. Refinancing or Consolidating the Loan
In financial terms,Â loan consolidationÂ involves taking up a different loan with a different lender, to repay your current loan.
Now, this option doesnâ€™t generally solve your debt problem, but it buys you more time to settle a new debt and still keep your vehicle. However, it is essential to note that this option entails you take a much larger loan to cover the original amount borrowed and interest accumulated by the auto title loan.
But, when you refinance a loan, you get an extended repayment period, and you might even get better interest rates.
If you have low credit, consolidation might be a problem for you because you have to borrow from banks, credit unions, etc. However, you can have a trusted friend or family member to co-sign the loan with you.
3. Prioritize Your Monthly Payments
A lot of people assume fast title loans require quick repayment or the loan is in default. Well, this is not true.
The reason you need to repay your auto title loan as soon as possible is to avoid paying more money in interest rates. Typically, every month you carry the loan; the interest keeps accumulating.
When you take the loan, always have a repayment plan in mind. This allows you to determine how long it should take you to repay the loan. With this in mind, it is easy to prioritize how much of your income goes towards repaying the loan.
If you stick to your repayment plan with utmost discipline, then you will pay off the title loan much easier.
Unfortunately, you may not be able to come up with the funds every month. Considering you borrowed the money because you were short, you may have to get creative. A good idea would be to lend out your vehicle to family and friends when you are not using it. This should help towards accumulating the repayment funds.
4. Negotiate With Your Lender
Lenders are business people, and as long as the deal makes sense, they are willing to push the loan for a given amount of time.
Hence, if you realize you might not be able to repay the loan within the agreed upon timeline, you ought to contact the lender beforehand. Inform them you have run into some trouble and you might not be able to meet the repayment deadline. Ask them if they can provide an alternative repayment plan or push the deadline.
A sensible lender will understand your situation and depending on their businessâ€™s position; they will avail one or two options of how to proceed. In most cases, they are willing to push the deadline by a week or two.
Understand that not all lenders are the same. To avoid any inconveniences, initiate negotiation as early as possible. This will give you room for further talks in case your finances still donâ€™t work out. Donâ€™t wait until it is a few days to the deadline to start negotiations.
5. Filing for Bankruptcy
Filling for bankruptcy doesnâ€™t necessarily provide relief of the loan, but at the very most, it could buy you some time to settle the car title loan. Nonetheless, your vehicle will still get regarded as collateral.
The viability of this option is not set in stone, and hence, you will need to get in touch with a lawyer and assessÂ your bankruptcy options.
Finally, on Paying Off of Your Car Title Loan With Ease
A car title loan is a viable solution forÂ accessing quick moneyÂ when you are in a financial fix. However, when taking up the loan, you should consider:
- Who are provides the best car title loans near me?
- How much do you need?
- How fast can you comfortably repay the auto car loan?
- What is the repayment plan and do I have a plan B?
The easiest way to have peace of mind with a title loan is to borrow the least amount of money possible and maintain your monthly payments.
Are you short on cash with a low credit score and looking for a quick loan? Get in touch with usÂ for the most affordable title loan. We provide a variety of title loans with flexible repayment terms.