As a bit of a disclaimer here, Everybodylovesyourmoney.com does not advocate taking out title loans. They’re pretty much a last resort. But since we get so much demand for them, here are a few words about how manage your title loan debt.
First, title loans are high risk. If you choose the wrong one, you can pile up interest fees, risk losing your car to your lender, or experience bad customer service. Again, you have options! If you need title loan help, here are some steps to consider:
Work Hard And Pay Off the Loan
If it’s within your means to pay off your title loan fast, do it. Its the best way out of a bad loan situation. Look for lots of side jobs, or find ways to make extra money to pay the balance and end the loan without any lingering debt to that lender. Go hard on it. Here are a couple of good lists to get you started.
Dinksfinance – Nine Ways To Make Extra Money
Savingadvice.com – 38 Ways To Make Extra Money
Pay it Off With Another Loan
Another way to pay off your existing title loan is by replacing it with another title loan. This idea might baffle you at first glance, which is totally understandable, but it has worked for many people. We are talking about nothing else but title loan refinancing with a new lender. You may still have a title loan to pay off but with better terms and probably a better lender. Warning: this won’t get you out of debt, its just going to make the debt a bit easier to carry.
Negotiate With the Lender
If you’re struggling to pay off the title loan, talk with your lender. They could be willing to extend the length of the loan to allow more time for you to pay it off. They could also work with you on your payment installment amounts or adjusting the interest rate. If you’re having trouble, its in their interest to work with you – at least that way they’ll get paid.
Use a Credit Card
Credit card debt isn’t ideal, but it can be a better alternative to racking up more fees with your title loan or losing your car when you can’t pay off the loan.
- Use a credit card to pay off your bills. When you’re in a financial bind, a credit card can settle your outstanding bills and give you more time to pay off the card’s balance.
- Use a credit card to pay off the title loan. If paying off the title loan is out of your reach, pay the balance with a credit card.
Be aware that credit card interest rates can be very high, especially if you don’t have good credit. You could be trading a bad title loan situation for a bad credit card debt situation. DON”T DO THAT.
Sell the Car
With a title loan, you retain the use of your car while your lender holds the title for you. However, if you can’t pay off the loan, selling the car can give you the cash you need to cover the remaining title loan amount.
Enjoy public transportation or invest in an inexpensive replacement vehicle until you get financially back on your feet.
Default on the Loan
Defaulting on the loan should be your last resort. If you stop paying toward the loan, your lender will keep the title and repossess your car. However, your loan payments will end, and that can help you start fresh without a title loan hanging over your head. This is almost sure to ruin your credit. It can take up to 5 to 7 years to for a default to clear off your credit, and it will cost you big time in terms of your ability to borrow money from others. Bad credit can also cost you dating partners, housing and jobs. Think very, very seriously before you decide to do this.
Don’t Panic! Get Title Loan Help
When you realize you’re in over your head while trying to keep up with payments, get title loan help. Follow these tips or contact us with questions! We can provide guidance or direct you to resources that can help you work through a bad title loan situation.
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Image credit, Ken Teegarten, via Flickr.