There's no getting around the fact that your vehicle can be repossessed if you can't make payments on a title loan. Losing your car because you defaulted on the payments is one reason you must be proactive to avoid this situation. Apart from the inconvenience of not being able to drive your car, repossession can impact your credit score and interest rates with any future loans. This article discusses various ways to get out of a title loan!
Get Out Of A Car Title Loan Without Losing Your Vehicle
The easiest solution to get out of a car title loan is to be proactive and pay off the loan amount as quickly as possible. You can do this all at once with a lump sum payment or make all your required monthly payments on time. Prioritize saving as much money as possible to pay down the borrowed amount. Contact your lender to see if they will forgive any debt or allow an early payoff with lower interest rates. If you have extra cash flow each pay period, consider paying more than the minimum, which will get you a much quicker repayment term. Let's break down your options to get out of your lending obligation without losing the car.
Refinance your future title loan payments.
Have you ever considered refinancing your current title loan? It doesn't matter if you refi with the current lender or find a new company that offers better rates and payoff terms. Once approved, you should get new payoff terms with a lower monthly payment. Refinancing is much easier if you're still current on the payments, so contact your lender to avoid a default. Contact Highway Title Loans at 877-433-5454 for more information about our refinancing options and to determine what types of terms to expect with a refi.
Get a personal loan to get out of a title loan
Car title loans typically have high interest rates, so getting a low interest personal loan to repay your car title loan may make sense. Remember, most customers who take out title loans have poor credit and would have used a personal loan instead of a title loan if that was an option. But if your credit has somehow improved, an unsecured personal loan can be a viable option to get out of a title loan by paying off the entire balance.
Negotiate new payoff terms for your current title loan.
If you can't afford to repay the loan, contact the lender immediately and ask for new repayment terms. Negotiating a new payoff term is different than refinancing, as you simply ask the lender if they're open to lowering the APR or reducing the balance owed. You'd be surprised at how often you can get new payoff terms by speaking to the right person at your car title loan company! Most lenders would rather have you make new payments under new terms than take your car away.
Default on the title loan & negotiate with your lender to avoid losing a vehicle
Defaulting on the monthly payments can also be an option here. However, a loan default is never something we recommend, and anytime you fall behind on title loan payments, you risk repossession. Even if a title loan lender in Atlanta repossesses your car and sells it at auction, you may still be responsible for an amount you owe that is not covered by the sale. If you're ever in a situation where you may default on the payments, it's best to contact your lender to see if there are other options to avoid having your vehicle repossessed.
Contact your lender to get out of a title loan.
We can't stress enough how important it is to stay in touch with your lender if you're in danger of defaulting on the payments. All title loan companies have customer service teams willing to work with you to keep your business. Yes, they can always repossess your vehicle and sell it at auction to cover the amount you owe them. However, this is not ideal for a lender as it costs money to repossess a vehicle and get it ready for auction. On top of that, there's no money coming in as they're no longer getting your monthly payments.
Lenders are more willing to work with you if you stay in contact, and you can likely work out a deal to improve your rates or lower your monthly payment. Even if you're stuck in a title loan, there are options, and Highway Title Loans can help you chart a path to get back on track with payments and eventually get the car's pink slip back. Contact us at 877-433-5454 to get out of title loan debt!
Janet Patterson is VP of Marketing Communications for Highway Title Loans and the feature editor of its Lending Blog. Janet has worked in the financial service industry for over a decade, with 7 years of experience in the car title loan industry. She previously managed a customer service team that helped and advised consumers on all their lending related questions and concerns.