Wondering how to get out of title loan debt? This post will guide you through 5 amazing ways to do that.
If you happen to be someone who has a car title loan then you’re probably paying tons and tons of fees interest rates because if you don’t, you risk losing your asset which isn’t a good option. So instead of gambling with your asset, we would suggest that you take some time, do your research, and search for ways through which you can get the title loan off your backs sooner rather than later.
If you’re wondering how you can get rid of the loan since your credit isn’t good enough, we would like you to know that there are still ways through which you can put it behind. You can involve a third party or talk to the lender or look for other financing options and see which one suits you best.
We are here to share a number of ways through which you can get out of the title loan debt but before we get into those details, let’s talk about the title loan itself.
What is a title loan?
Title loans seem appealing to a lot of people. This is mainly because they have very low or even no credit requirements, come with smaller repayment options and you can get these loans for small sums. For an instance, you can get a title loan for an amount as low as $100 and as high as $10,000.
However, though it may seem that title loans offer a lot of benefits. What most people don’t know is that these loans are ridiculously expensive with an annual APR of 300%. They are also pretty risky. Let’s suppose you have got yourself a loan to buy a car. But you will have to put your car as collateral in your contract terms and if you fail to submit your monthly fees in time, your asset will be seized.
And if that happens, you will most probably be out of work at once with no chance of getting your vehicle back. This is one of the reasons why title loans are illegal in a number of states.
So, now that you have a title loan on your back, how do you get it off of you?
5 ways How you can get out of a title loan debt
In case you have taken a title loan, there are few safe ways you can get out of sooner than you’re supposed to. We are enlisting them down below,
1. Negotiate your terms
The very first thing that we would like you to consider is negotiating your contract terms with your lender. We don’t guarantee this will work but it won’t hurt to ask. If you want a lower APR or smaller payments, you can suggest your lender to adjust your repayment options according to your budget.
We would also recommend that you always get the agreement in writing and never depend on verbal conversations. This way, if something goes wrong down the line or your lender goes back on his/her word, at least you will have proof to claim your money.
2. Pay off as early as possible
If there is even the slightest possibility of you coming up with the cash that is needed to pay the debt, make use of that possibility in the wisest way and pay off the loan as quickly as possible. You can always go for a temporary job, work overtime or ask a family member to lend you some money to pay the debt.
If you are getting the amount from a family member, you will have some relaxation with regards to the repayment meanwhile, you will be able to get the car back in your name.
3. Debt management
Another option that you may be able to avail is debt management. If the loan is too much and you feel that you cannot take care of it all by yourself then there are non-profit organizations that can help you with that.
They can negotiate with your lender on your behalf and come up with favorable terms. They can also launch a debt management program that will help you manage the whole repayment process and smoothly get the car back in your name.
But keep in mind that debt management is different than debt settlement. In debt settlement, a lot of damage is caused to your credit which is not recommended.
4. Try refinancing
Refinancing yourself by getting a better loan at lower rates is another way out. Your credit is most likely to improve once you have taken the initial title loan debt which in turn will qualify you to get a bigger loan.
This way, you can pay off your initial debt and repay the newer loan with lower fees gradually. This is also known as consolidation or replacing loan with another loan.
5. Sell out your car
It might make sense that if you don’t have extra cash available to pay off your debt, you can sell the car and replace it with another less expensive car to keep your affairs in order.
Selling out a car that’s title doesn’t belong to you might be a bit difficult but it is definitely possible. This way saves you thousands of dollars that you were going to pay otherwise in the form of interest. It will also allow you to make smaller monthly payments and get your cash flow in order gradually.
As you can see, getting a title loan debt might seem like an easy and convenient way initially but it can cause a lot of havoc in the long run if you aren’t clear with the terms you have settled. We hope we were able to shed some light on how you can pay of the debt without causing any more trouble to your credit.
If there is anything that you might like to add here, do let us know through your feedback below. We highly appreciate it.