Is it Difficult to Pay Off or Get Out of a Car Title Loan?Steve Driz
Is it Difficult to Pay Off or Get Out of 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, the lender may end up seizing your vehicle if you do not make any payments.
Due to the expensive nature of these types of loans, some borrowers are unable to repay. If you are going to take up title loan with your vehicle, then you have already considered the possibility of losing your vehicle.
Nonetheless, this doesn’t have to be the case.
If you are wondering how to get out of 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 you’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 get out of the auto title loan.
Selling your vehicle could get complicated because your ownership documents are still with the lender. You could ask the lender to sell the car, but they will only sell it at a price that covers the loan, but the vehicle could be worth more.
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.
This option can save you thousands of dollars in interest and fees for the title loan.
2. Refinancing or Consolidating the Loan
In financial terms, loan consolidation involves taking up a different loan with a different lender, to repay your current loan.
Now, this option doesn’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 get out of 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 business’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. Sometimes, they will ask you if you are okay with a higher interest rate to cover for the loan extension.
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 don’t work out. Don’t wait until it is a few days to the deadline to start negotiations.
5. Filing for Bankruptcy
Filling for bankruptcy doesn’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 assess your bankruptcy options.
Finally, on Getting Out of Your Car Title Loan With Ease
A car title loan is a viable solution for accessing quick money 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 keep your vehicle with a title loan is to borrow the least amount of money possible and maintain your monthly payments.
Are you short on cash will low credit and looking for a quick loan? Get in touch with us for the most affordable title loan. We provide a variety of title loans with flexible repayment terms.