Title loans are quick and easy ways to get instant cash, even if you have bad credit. The value of your car is all that matters when it comes to getting approved for a loan. So you need to put your car up as collateral in order to get a title loan. There is also the risk of the lender taking back your car and selling it if you default on the loan.
If you find yourself in a financial bind, rest assured that there are ways to avoid a title loan repossession. Still, it’s important to be able to get out of the situation in order to avoid any long-term consequences.
5 tips for preventing a repossession
With so few options, most title loan agencies will try to avoid ruining your car. With legislation and regulation coming into play, they only need wait a while to attach their seizure rights, at which point they will have no opportunity to auction the automobile away.
Ways to avoid a title loan repossession.
Stop a title loan repossession
If you are having trouble repaying your loan on time, talk to the lender. The first step before trying to tackle other financial options is to negotiate with them and reduce your payments or try renegotiating your terms. Don’t ignore the lender, because this will likely result in you losing your car. Try asking them for a solution, such as lengthening or increasing the period of your loan, reducing monthly repayments or offering another option until you can pay back what’s owed.
Instead of going through the trouble of selling your car at auction, which is not a guarantee to be successful without a newer model, you can sell your car and use the money to pay back the title loan. Some newer models may not cost as much as what you owe, so you might be able to make a profit.
You can save big bucks by downgrading your car, whether it is 10 years old or newer. You’re able to sell your vehicle for less, but get higher savings on interest and fees by upgrading your car to a newer model.
Protect the title loan
Another way to get out of your title loan is to replace it with a different loan, even though it won’t solve the main problem of being short on cash. However, if you are certain that make it will be paid off before its due date, a fixed-rate payday loan from a bank or online lender can help lower your expenses.
In situations where you’re having trouble obtaining a bank loan, you should visit local banks and credit unions; banks where the likelihood of qualifying is better than at other lenders. In addition, involving the title lender let’s you have back your title.
Title Loan Requirements
Following are the requirements to get a title loan:
- Be 18 year old or more
- Own a vehicle
- Hold a lien-free car title
- Start the application online or at our physical office
- Go to our store for a visual inspection of your car. (Find out “How to get a car title loan
without a car?”)
Have a reliable source of income.
However, if you don’t have a job, unemployment, retirement, or disability benefits will work
Advice for finalizing a title loan
Unless you are confident you can repay the loan, it’s best to avoid borrowing one in the first place. It’s also important to know what will happen if you don’t start paying back a title loan early on. If that happens, build up an emergency fund and improve your credit so that you have more options when you need to borrow money in the future.