How do you get rid of a title loan

If you’re facing financial difficulties when you’re struggling financially, a vehicle title loan may be the perfect solution. This kind of loan lets you take out a loan in exchange for the car title. However, they can be costly and leave you in a loop of debt, which can make them anything but a pleasant journey.

But, there are options to eliminate the title loans on your car, and knowing the best way to proceed will save you lots of cash and stress, check here first.

What is a title car loan?

A title loan for your car is a modest loan typically between $100 and $5,500 which is secured by your car.

The lender will give the borrower a large amount of money, and you hand over the title of your car as well as an additional set of keys to secure the loan. A typical title loan for cars comes with a triple-digit annual rate, requires repayment within a month, and is much less than the worth of the vehicle.

If you aren’t able to repay the loan within the agreed period the lender may take your vehicle or offer the option to “rollover” the loan into another loan. However, you’ll be charged more costs and interest on the amount you have to pay, which could lead to a lengthy loan cycle.

How do you get rid of a title loan for a car

If you’re already carrying a title loan for your car that you’re paying for, it’s likely costing you lots of cash. However, there are options to pay off this kind of loan whether you agree to the terms or apply for the same, cheaper loan.

Repay the loan

In the event of a financial crisis depending on your financial situation, repaying the car title loan may not be feasible — however, it puts the brakes on borrowing. Contact the lender of your title loan and ask for the repayment amount. Determine where you will get the funds to pay back the loan. Try these options:

  • Begin a side-job to earn extra cash.
  • Request a salary increase by your company.
  • Make a sale on a prized item you will never forget.

Consider debt settlement

If you’re unable to afford the entire amount of your payoff determine what you are able to afford to pay in an installment. The lender might prefer an amount lower than the original one, particularly when you’ve had a history of missing installments. This process is known as debt settlement. After you have agreed to an amount, write the details down in writing, and make sure that both parties sign the agreement so that the lender isn’t able to demand additional money in the future.

The drawback can be the fact that your credit might suffer a decline. While you’ve paid the credit, it was lower than what was originally agreed upon. The lender could declare the account to credit reporting agencies under the name “settled.” The kind of mark may be on your credit report over a period of up to 7 years. It could lower your credit score however, you don’t need to be concerned about being in debt to an unsecured title lender.

Discuss the loan conditions

Instead of paying off the debt, you can bargain for more affordable loan conditions. Request an interest rate that is lower or a smaller monthly installment, a longer time frame, or an amalgamation of all three. You must be able to pay the new terms and make sure you get the details in writing. Maintaining your account in good order and at reasonable conditions will allow you to pay off your debt and maintain your credit score.

What happens if your don’t pay back title loans?

You can decide to not pay the title loan at all However, be aware of the consequences of the default.

Lenders will be able to report late payments to credit bureaus, and could ultimately send your unpaid due debts to collection agencies. Both marks of derogation can stay on your credit report for as long as seven years and could negatively affect your credit scores.

The lender can also seize the vehicle. Certain lenders require that borrowers put a GPS device on their car prior to taking their loan. In the event that you default and attempt to conceal the vehicle, the lender will make use of the GPS to find it and could charge an additional cost. This leaves you with lower funds, damaged credit, and no means of transportation.

In many states, lenders have to notify you prior to repossessing your vehicle. If you are notified of this you must contact the lender as soon as possible and attempt to bargain with the lender and refinance your loan.

Refinancing a title loan for a car

Another option is to request an alternative loan with a lower cost and use the proceeds to pay off the loan.

You’ll need to ensure you’re eligible for the loan and also review the terms of the loan to determine if it’s affordable. The new loan must be accompanied by an interest rate that is low and fixed with lower monthly payments, and enough time to pay back the loan.

Check out different banks and credit unions to find the possibility of an auto loan or personal loan. Also, check your credit card to see the possibility of taking out an advance in cash. If you are unable to find reasonable conditions, you can ask someone close to you to sign the loan or loan you the cash.

If the loan is backed by more favorable terms, it will cost less than taking over your title loan. When you’ve paid off the loan on your title and you’ve got the title back.

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