Has your life been unpredictable lately? Is your financial status in total havoc? Of course, car title loans are so easy to get into, but finding a way out seems much harder. Most people opt for title loans because it’s a simple option to get quick cash or credit. Plus, it might have been your only option at the time.
If you have recently taken out a loan on your vehicle and now you’re struggling to repay it, we understand your concern. You’re afraid of losing your car sooner or later, and that fear is justified. Luckily, there are legit ways to get your driving pal safe and sound from a title loan.
How can I legally get out of a title loan?
If you thought that there’s no way of escaping car loans, you were utterly wrong! In reality, there are several options that you can take into account to get a title loan relief. Paying off the credit in full is no option because if you had the money, you wouldn’t be in this jam. Here are some smart ideas on how to keep your automobile burdened with a title loan for good.
- Get a cheaper vehicle. A wise idea would be to sell your expensive car, settle the loan, and then purchase a more affordable model. However, finding a buyer for a lien-burdened vehicle might prove tricky. If you have a newer car and decide to sell it below the projected market price, expect to resolve the matter quickly.
- Renegotiate the loan. Meet your lender and try to alter the terms and duration of your credit. Some lenders may be willing to lower the interest rate if you’re already lagging with payments, and your credit score is poor.
- Credit card advance. A cash advance is a way to get around only if you have room in your credit card. If that is the case, take the right amount of money to settle the debt in full. The APR of credit cards is around 24%, so this is way better than paying 300% APR or losing your car.
- Sell. Consider whether you have some property less valuable than your car. Focus on electronics, baby equipment, big furniture, or musical instruments that you no longer use. Finally, use online selling platforms and social media and post photos and detailed descriptions of the items for a faster sale.
- Earn more. There is nothing more legitimate to earn cash than taking on an additional job. Depending on your interests and abilities, consider applying for a dog walker or a house sitter. A delivery driver or a handyman job should also earn you some decent cash. Even renting your property is a way to get ashore. If you make $30 per hour with four working hours a day, paying off your debt might be several weeks away.
- Refinance the loan. Jumping from one credit into another is a short-term solution since the credit circle gets even more vicious. Consult a friend or a close relative to finance you to avoid losing your vehicle if you cannot execute regular payments. Set up a repayment plan and even offer to pay a 5% interest rate per month. This rate is way more acceptable than the 25% high interest imposed by an established loan company.
Is it illegal to sell a car with a title loan?
The truth is that this procedure is not illegal, but it is also challenging to carry out. Having a title loan on your vehicle technically means that the lender has the rights reserved to it. In essence, you used your car as collateral to get approved for the loan. The lien will only be released after you pay off the entire loan.
As a result, you will have the liberty to officially transfer the car title to the new owner after clearing the debt. If you attempt to perform this earlier, the authorities get immediately informed of any liens on the car. Consequently, they will most certainly stop the transfer you’re trying to accomplish.
The only viable opportunity to sell a car with a title loan on it is to discuss this honestly with the potential buyer. If this is a relative or a close friend, they might be more flexible to wait for their title transfer. The paperwork process is complex and might take some time before you’re finally able to transfer the title to the new owner.
Other buyers interested in the vehicle may not want to proceed with the purchase if they know you have to pay off a loan first. The majority would like to receive the title of the car immediately after they pay for it. However, if you establish mutual trust and the purchaser is ready to wait a few weeks, congratulate yourself on the smart move.
Lastly, it all comes down to the conclusion that paying off the car title loans first is the most straightforward solution. If the title on the vehicle is clear and you own it, buyers will be more reluctant to strike a deal with you.
Can I pawn my title without the car?
Are you in the middle of an emergency and need urgent cash? Your bad credit score is far from perfect, so you’re thinking about pawning your car. Well, if you were concerned about keeping the vehicle for use after putting a lien on it, despair no more. Though the ownership gets transferred to the lender, you retain your car for daily use.
Let’s presume you have decided to pawn the title to your car since you exhausted every other alternative to obtain credit. Based on the amount you want to lend and the value of your vehicle, the lender approves the loan. Afterward, you must pay monthly installments until you settle the loan amount, plus additional interest.
Remember that a title loan company might ask you to arrange additional insurance on your vehicle during the pawn. However, the best thing is that the car stays in your possession to drive it as usual while executing acceptable monthly payments. Finally, look for a lender that won’t charge you extra fees for early payments.
What happens if I don’t pay a title loan?
In case you default on your car title loan, you risk facing severe consequences. Lenders rarely show mercy when clients tend to miss loan payments. First of all, they’ll try to renegotiate the loan with you and maybe help you if you’re in financial hardship. If this fails, you’ll have to pay fees for late payments. The expenses you pay and the period charged may vary depending on your contract and the state regulations.
Further on, repossession comes as the last resort measure if you fail to pay your title loans. The lender has rights reserved to seize your car at any time without notifying you since you used your title as collateral. Meaning, your vehicle gets repossessed and taken to a tow site for sale.
There is a chance you can regain the car if you pay in full before it gets sold. If not, say goodbye to your beloved friend whose credit goes to the hands of another owner. Your only hope is to receive some cash from leftovers once debts get entirely settled.
Takeaway
In case you have taken out a title loan or credit, you surely know it requires much longer to settle than you initially expected. Loans are a risky business, and no lender will think twice before seizing your vehicle if you miss paying the loan amount. Take our suggestions seriously as they might prove extremely useful in case you want to break free from an auto loan.
Did you find our article on car title loans helpful? Then, go on and explore the other sections dedicated to various types of loans on our site. Also, remember to register for our newsletter. We also invite you to share your experience with a title loan in the comment area.
A title loan is sometimes difficult to pay. And because we don’t like to stay without the car and the money or to pay extreme high fees it is good to know that there are some ways to avoid it. We are all in difficult situation since the latest economy crash that made an impact on all of us and the companies we work for. To be honest if I didn’t take the title loan before this crisis, with the latest crisis I wouldn’t think of it. Now I am having trouble to have money for the regular home expenses. The title loan makes it more difficult.
Transferring the title loan to someone else is not easy thing to do. Nobody wants to buy a car that has a title loan on top because there are some cheaper options. I have problem selling my car because of the title loan so I will have to find other ways to do it, since I have no ability to pay the title loan any more.
Believe it or not I managed to negotiate with the lender for better terms for the title loan. I get an extension for the payments and smaller interest rates and I am very happy with it. So don’t be afraid to negotiate. They are willing to make some changes in the initial agreement and the collapse of the economy made them to review their policies and to approve some extensions on the payments. They’ll rather get their money in a longer period and smaller fees than not get them at all or to have to go to court.
My experience with the lenders and loans of any type is not good. I avoid titles and loans in every way possible. It is better for me to take some small loans from friends and family and pay some interest rates than to go to banks and institutions.
Having a title loan is not easy. But anyhow it is better than to have to pay it in cash and the problem is that we don’t have to pay it in cash.
The article is great. It is better to know all your options in advance before getting a title loan and this kind of articles can help to know in what you get involved to.
I don’t think that you can resell you car when having a title loan. It is very difficult to do so. But if you can not pay the installments maybe it is better to take another loan to cover it than to stay without a car. We all think that we can pay considering the income that we have when we get a loan., but we always have to plan unplanned. Difficult situations come and we can not avoid it. So it is better to have an alternative when getting some loan if we want to avoid big interest rates, enormous fees for late payment and sometimes paying double on the initial loan.
Nice article, thank you for sharing these tips with us.
All the loans are tricky. You have to be prepared to pay them on time or you will finish paying high interest rates and fees which will burden the income even more. Maybe taking a side job when having a loan is a good plan. Having $100 per week is something that can help a lot if you have a job and steady income. We should all think about it.
Even the ones that should be considered rich have difficulties and unplanned situations so knowing how can get out of some loans is useful.
I don’t think that you can resell you car when having a title loan. It is very difficult to do so. But if you can not pay the installments maybe it is better to take another loan to cover it than to stay without a car. We all think that we can pay considering the income that we have when we get a loan., but we always have to plan unplanned. Difficult situations come and we can not avoid it. So it is better to have an alternative when getting some loan if we want to avoid big interest rates, enormous fees for late payment and sometimes paying double on the initial loan.
To be on the safe side maybe it is better to get some loan for the down payment of the car that you want to buy. Title loans are not good solution especially in a situation like this.
I had a title loan on my car a couple of years ago. I really had problems paying it. When I calculated in the end it costed me a couple of thousand more that I’ve expected. So from this point of view it was not a good decision to do it. If I have to do it again I will do it in any other way possible rather.