Title Loan Relief
A title loan can be a huge help when time and money are short and you need immediate financial assistance, but paying a car title loan off is often a challenge. You could find yourself only paying the interest every month, which means you're making no real progress on the loan. If you need title loan relief, there are a few options available, and this guide will help you find the one that's best for you.
Paying Off Your Title Loan
Let's start with the most obvious option, which is to pay your title loan off in full. Now, if you could do that, you probably wouldn't be seeking title loan relief, but it's still worth considering if there is any way you could come up with the money to make the full loan payment.
If you've got a big tax return you're about to receive or you can borrow the money from family, it's best to get what you can and take care of your vehicle title loan. Even if you borrow the money from people you know, at least they likely won't charge you much interest.
Of course, it's understandable that you may not be able to get enough money to do this, which is where one of the next three title loan relief methods can help.
Refinancing with Another Loan
There's always the "fight fire with fire" approach, also known as refinancing with another loan. Here's how this would work:
- You apply for another loan.
- Upon approval, you use that loan to pay off your title loan.
- You begin making payments on your new loan.
When you refinance, you can get a new loan with a longer term and a lower interest rate than your title loan. You'll end up paying a lot less this way than if you'd kept extending your title loan month after month, and you don't need to worry about hitting any title loan extension limits.
This method will be most effective if you have a good credit score, as that will allow you to get a loan with favorable terms.
Extending the Title Loan
With online title loans Orlando and most other car title loans, you can extend your title loan. You do this by paying enough to cover the interest, along with any loan fees. However, the lender will charge new interest and fees each time you extend the title loan, making it easy to get into a cycle where you're only paying enough to keep your loan going every month.
If you're going to extend a title loan, it's important that you have a plan for how you're eventually going to pay it off. Maybe you know that a bonus is around the corner for you at work in a month or two. Just make sure you think ahead and don't get into the habit of extending a title loan over and over.
Getting Rid of Your Car
This may not be the most appealing option for you, but it can work as a last resort. There are a few ways you could get rid of your car in this situation, including:
- Selling it
- Surrendering it to the title loan company
- Defaulting on the loan and having it repossessed
The first option is by far the best choice, as the other two will likely damage your credit. While it's a bit trickier to sell a car when you don't have the title, it can be done.
For the most part, selling your car would work exactly like it would normally, as you'd need to find a willing buyer and set the price. The difference is that you would need to have the buyer pay off the rest of your title loan first so that you could get the title back, and then pay you whatever amount is left from the price you agreed on.
It's certainly not convenient to sell a car this way, and you could have a buyer who sees that you're desperate to sell and tries to negotiate a lower price to take advantage. That's why you may want to explain the situation regarding the title loan after you decide on a price with them.
You don't need to have a title loan take over your life. If you're struggling to pay back a title loan, try one of the title loan relief options above.