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.
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.