Dealing With Debt Settlement For Vehicle Title LoansFast Action Finance SEO
You can compare getting car title loans in Mississauga with getting in bed. It is easy and fast to get in but not so when you need to get out of them. Car title loans are very easy to apply since all you need to have is a valid national ID and a lien-free car title. Car title loans usually take 30 days to be repaid with an interest. Sometimes it happens we are unable to pay off our loans in time due to some unavoidable circumstances. It is advisable to accept the situation as it is, so as to have a sober mind on what will happen next and plan how you can handle the situation before it gets worse.
Obviously, when you can’t pay back your title loan, the lender will repossess the car and sell it to recover his money. This goes to your financial records and it affects your credit score. It is always advised to have a plan B in place before you take any form of a loan that will reassure you that you will be able to pay off your loan when the need arises. However, most people don’t always have a plan B and so they face the great danger of losing their property. This article will help you understand the options you have to help you with debt settlement on car title loans.
Paying off the debt
I know you are wondering how this applies to your case since you don’t have enough cash and you are seeking alternative ways of settling your debt. Well, the good news is that there is more than one way you can repay off your title loan. You can consider approaching your lender to give you payoff instructions. Some lenders are not willing to do so since they hope to drag off the process for you to pay more interest. You can request for a longer loan term to pay off in smaller installments that you can handle. This is only applicable if you are sure you will have some money coming in.
If no money is forthcoming, you can opt to downgrade your car. This means selling your car to repay off your debt and using the remaining cash to purchase a car of lesser value. This however needs you to involve the lender since they have your car title. You can also apply for a consolidation loan from your lender or any other lending company to pay off your car title loan.
This is just a temporary way to clear off your debt since you are stuck with another loan. The upside of this move is that it keeps your car from being repossessed. It also ensures that your credit score stays intact. You can negotiate better terms of repayment that give you enough time to settle your debt.
If you are cash strapped and you have no other ways to acquire extra money to pay off your debt, you can disclose this information to your lenders to let them know you are unable to clear your debt but willing to negotiate to clear a certain amount. This will usually not go well with lenders and they will want proof that you cannot pay off your debt. This requires you to have high negotiations skills.
Lenders are willing to settle on an amount usually 25 percent of your loan, than having to lose out altogether. If your negotiations skills are somehow wanting, you can approach Debt Consolidation services to negotiate on your behalf on a debt management plan. However, you need to understand that if a lender agrees to these terms; your credit score still gets affected. Ensure that you have your final agreement in writing because verbal agreements cannot stand in court.
Defaulting should be your absolute last option
This should be your last option if all other avenues fail to materialize. Defaulting means you simply stop making payments to your lender. Your car gets repossessed and you not only lose your property, but you also get a bad credit score. It helps to voluntarily give up your car to the lenders so that you don’t leave each other on bad terms.
Filing for bankruptcy is also another way to go. It saves you from losing any more property if you have more loans to repay. However, this may cost you more in legal charges since you need to hire a lawyer to help you with the proceedings. It also means that you have to lay low for like seven years since your credit score will be very low but in the meantime, you can use up the time to rebuild yourself.
Before you get a car title loan, always ensure that you are well prepared to settle your debts in time. There are more implications if you don’t. Sometimes, it also pays to talk to your lender because they may offer you various ways to pay off your vehicle title loan.