Car title loans usually put the borrower in an unending cycle of repayments due to unnecessary charges and high-interest rates. It gets worse if you don’t keep up as planned, for you risk losing your vehicle to your creditor. To avoid such an uncomfortable occurrence, check out the following methods of getting out of a title loan and maintaining your car’s ownership.
What Is a Car Title Loan?
A car title loan, also called an auto title loan, is a form of cash advance where the borrower uses their vehicle as collateral and is expected to pay it back within a short period. If payment doesn’t occur due to the borrower’s refusal or whatnot, the creditor becomes the car owner and might put it up for sale to recover their loss.
Auto title loans are equipped with the means of getting people quick funds to sort emergency bills. Like payday loans, you can get a cash advance with no credit check. The focus is on your car’s value, and the majority do not need to see a good credit report. The procedures involved with car title loans are straightforward and fast. You only need to go to a loan place with your vehicle, put up a request, and get what you need in less than an hour. It gets easier when you return for a rollover.
The main difference between title loans and payday loans is the collateral.
What To Do To Get Back Your Car
If you do not want to risk losing your car ownership, which is a consequence of default, here’s what you should do:
- Make Payments Regularly
If you need a 100% guarantee of getting back your car from a title loan, all you need to do is make repayments. This is not the go-to option for most, as people get caught in debt because they are cashless in the first place. However, placing a priority on loan refunds is essential. You should make setting aside some cash for your car title loans a habit. If you have a few cash excesses at month end, save it up. This will help speed up the payment plan and reduce the amount paid as interest.
- Take a Traditional Car Loan
Applying for a traditional car loan to pay your title loan is a better way of ensuring that you maintain your car ownership. While it also involves tying your loan around your vehicle, it is much better than an auto title loan. The cash advances are offered by trusted organizations like nearby banks who tender favorable rates and payment terms you can work with. The loans on car can extend up to years, making them easier to pay off. However, a credit report is required, and you’ll need a good score.
- Apply For Personal Unsecured Loan
Another way to pay off a car title loan is by taking a personal unsecured loan. The money borrowed can be given to the title loan creditor, getting you back your car’s full ownership. You’ll find many online loan apps with competitive rates willing to provide you with cash advances. Sometimes the loan might come with high-interest rates, but it’s better than car title loans in terms of APRs and payment periods. You will be informed of your eligibility as regards your credit score before you dive too deep.
- Negotiate With Your Creditor
Having a chat with your title loan lender is a reasonable step if you realize your inability to pay off your loan as promised. Most offer listening ears and are willing to negotiate favorable terms. They can extend your deadlines and draw up a flexible payment plan. They prefer you pay up as opposed to claiming your car’s ownership. While this will help prevent losing your vehicle, giving you more time to repay will ultimately increase your debt due to added interests. As a result, paying up as scheduled is usually the best option.
- Ask For a Credit Card Cash Advance
Getting a credit card cash advance is an easy way to make payments for your auto title loans. It is not without its downsides, but it is better in terms of repayments. Your credit cash issuer will give you a short-term loan, but some might be against borrowing your entire credit line. Endeavor to pay back as soon as possible, or you’ll risk accruing a bank-breaking interest. It also comes with a 5% fee.
Car Title Loans By Military Members
The Military Lending Act (MLA) offers exclusive protection for military borrowers and their families. Lenders are not allowed to charge above 36% as an interest rate or request a fee for quick loan repayment. They are free of lending policies deemed extreme, making the loan payment a bit easier.
It is usually advisable to steer off title loans and seek alternatives like credit unions, payday loans, etc. While payday loans also have a high-interest rate, it doesn’t involve the risk of losing your vehicle. Apply for a cash advance at Capital Pacific Bank and sort your bills within 24 hours— no collateral. This will keep your means of transport safe while you borrow to make ends meet.
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