Looking For Ways To Pay Off Your Car Title Loan?

When you have a personal emergency that does not require a considerable amount of cash, it is better to go for title loans in Brampton and other areas across the Greater Toronto Area. They are fast to process, unlike the traditional loans where it takes longer to process the loan. Most lenders only require a lien-free car, ownership, insurance and a government-issued ID.

Traditional loans require one to have a high credit score if their loan is to be approved fast enough. This is usually not the case with a car title loan. You can have a bad credit score and still apply for a car title loan without attracting huge interest rates. The lender will place a lien on your vehicle, which will be immediately removed upon the payment of the loan. The lien secures the lender’s interest in the loan, but you can still keep and use your car as usual.

Car title loans are usually not publicized as much as other types of loans. Not so many people are aware that you can use your car as collateral to acquire a short-term loan. It is very easy to apply for a car title loan, and the amount that can be borrowed depends on the value of your vehicle. More money can be lent against vehicles of higher value. The value of the vehicle depends on the make of the car, the kilometers, and how old the car is.

For example, you own a car that is worth $10,000 and your lender gives a $5,000 loan. The loan can then be paid off with easy and manageable payments that are agreed upon between you and the lender. In the event that you are unable to make a payment, it is best to call the lender to sort out the issue. Here are some ways to ensure that you are able to repay your title loan:

Set a budget

Image Courtesy FreeDigitalPhotos & Stuart Miles

Budget! Budget! Budget! I am sure you have heard that word a lot of times before. You should always ensure that you build saving skills as early as possible. You need to ensure that you have enough money coming in that will enable you to repay your loan and also have enough for your monthly expenses. You should never neglect your monthly expenses just because you are repaying a loan.

These monthly bills also affect your credit score as some types of lenders who care about your credit are able to review your financial history by looking at how you handle monthly bills. Make sure you set aside money for monthly expenses like the utility bills and food and then use the extra to pay on loans. If you cannot save extra cash after paying your bills then that means you have to cut on the current spending and limit yourself to stick to what is really necessary. This can be hard at first, but with time you adjust and you get to pay off your loan.

Longer loan terms

We cannot predict the future and sometimes we may have money in our savings account, but then disaster hits. The money in your account is not enough to cater for what you need to do and so you are forced to borrow. You need to sit down and calculate if you are able to pay back the amount of money you want to borrow. A car title loan usually takes one year to one year and a half to pay back. Are you able to repay that amount in such a set time? It can be beneficial to choose the one and a half year term as it keeps the payments smaller than the one year term.

Get a consolidation loan

If you are unable to pay off your car title loan in time, you can approach your lender or another lending firm to give you a consolidation loan to repay off the title loan.  You can also negotiate better terms in your new loan where they can give you more time to pay your loan, one that is within your budget. It is always better to call your lender and work things out than to ignore them.

Downgrade your vehicle

This should be your last option since it comes with so many conditions. An example of how it works, you can have a car that is worth $10,000 and you applied for a title loan of $4,000. If you are unable to pay the amount, you can find a buyer for your car and sell it for $10,000 and settle your title loan and buy a car worth $6,000. But you need to let your lender know your plans since there is a lien on your car.