How To Get Out Of A Title Loan As Quickly as Possible

Ways to Get Out of a Car Title Loan

If you’ve ever taken out a car title loan, you know how easy they are to get. You may also know how hard they are to get out of. In the end, title loans can be quite expensive because they typically end up taking quite a bit longer to get out of than you originally suspect. Because they take longer, you risk accruing more and more interest fees and added fees and months go on. They can also be quite the bother because you can, as the name suggest, lose your car in the process.

So, how can you get out of a title loan? You’ve got a few options for relief.

The Easiest Option

This may not be much of a surprise to you, but we figure we should probably mention it anyways. The easier way to get out of your title loan is to pay it off. That is, however, easier said than done. If you had had the money in the first place, you probably wouldn’t have taken out the loan to begin with, and even if you are able to pay it off slowly, the interest loans can make it quite hard to make an impact overtime. If you do come into the money needed to pay it off, contact your lender immediately. Don’t be surprised if they’re not as enthusiastic about closing your loan as you are, though. Some lenders have been known to drag their feet to try and milk more money out of their customers who are already on the hook.

Swap the Car

If you simply do not have the money to pay off your loan, you can always sell the car you used as collateral to generate some cash. You will likely find that selling it is difficult because you do not have a clean title, but it can be done and it happens quite often. You can downgrade to a less expensive car, pay off your loan, and free up your cash flow. This can be a great option if you are able to find someone willing to take your car off your hands.

Refinance or Consolidate Your Loan

This is another way to get your title lender off your conscience and while it seems counter-intuitive, it actually makes a tone of sense. Refinancing a loan basically means replacing it with another loan, or taking out a different loan to pay off the original loan.

The way this works is when you are able to find a loan with a lower, fixed interest rate. You’ll still owe the same amount of money you owed on your title loan, possibly more, but it will not balloon and grow the way that your title loan was doing on account of its high interest rates.

Target a fixed-rate loan from a bank, credit union, or online lender first. You can also use a convenience check from your credit card if you are positive you’ll be able to pay it off in time before the promotional period ends.

If you find yourself running into roadblocks by seeking out title loans from those types of establishments, consider visiting small local banks and credit unions. You may have a better chance of getting approved at places like that.

As a final resort, consider seeking out a peer-to-peer loan, or even asking someone you know to co-sign on a loan with you to help you get approved. Just make sure that they know what they are financially and legally responsible for when they agree to be your co-signer.

Talk to Your Lender

Your existing lender may be willing to work with you if you know the right way to negotiate. Offer to pay what you can and see if the lender accepts that. This can be an especially solid option if your finances are quickly starting to spin out of control. If your lender sees that they have an opportunity to recoup anything from you, they might jump at the opportunity to do so. True Financial is available 24 hours a day for title loan to refinance a car title loan in California or apply for a new loan.

Even if your financial situation is quite that bleak, you may be able to talk you lender down to a lower interest rate or other adjustments to your payments in order the lighten the load. It could be a win-win for both parties, so it’s smart do advertise is at such.

If your lender does agree to take less than you owe, your credit will suffer, but a lower credit score is certainly a better option than financial ruin.

Default on Your Loan

Another option is to simply stop paying your loan. This is obviously not the best option because it will seriously damage your credit and your lender will eventually repossess your car. You may also still owe money on the loan if your car is not sold for more than the amount you owe. Still, you can take solace in knowing that you’ll be done with monthly payments, and that may be enough to help you get yourself set on a better financial path.

A small tip to keep in mind if you are considering defaulting on your loan is that voluntarily surrendering your vehicle can improve the situation and your credit score might not dip quite as much.

Avoiding Title Loans

Perhaps the best way to avoid getting into the potential sticky situations that come with title loans is to avoid them altogether. Instead, try to build yourself an emergency savings fund of three to six months’ worth of expenses and improve your credit so that you have more options the next time a financial hardship rears its ugly head.

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