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. They are fast to process, unlike the traditional loans where it takes longer to process the loans. Most lenders only require a lien-free title of your car 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 takes your car title as collateral and you get to keep your vehicle as you pay back your loan.

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’s title as collateral to acquire a short term loan. It sure sounds easy to apply for car title loan but you can easily end up losing your car if you don’t repay your loan on time. A car title loan usually means you cannot get huge amounts of money and the amount depends on your car value.

For example, you own a car that is worth $10,000 and your lender gives a $5,000 loan. In the event you are unable to pay your loan, you end up losing more as a borrower. Sometimes this happens because you simply did not take the time to understand the terms on a car title loan agreement. The following are ways you can ensure that you pay off your car title loan.

Set a budget

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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 lenders are able to review your financial history by looking 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 30 days to pay back. Are you able to repay that amount in such a set time? If your answer is no, then don’t despair. You can work out a longer loan term with your lender.

Check for additional costs

These are usually referred to as Add-ons in loan paperwork. Certain lenders require a borrower to take a life insurance before they can qualify for a car title loan. This is to assure a lender that in the event something happens to you that may cause your death; they are still assured to get paid their whole amount. This however, has more implications to you. You need to spend more cash on the insurance. you need to take time and ask your lender to let you know all other additional costs that are involved and weigh out if it is worth it in the end.

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. This saves your car from being repossessed. 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. However, you need to understand that you have to pay more interest on these kinds of loans.

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 he has your car title in possession and you cannot transact without it.