Title loans are easy to obtain, even when your credit score is not the best. They can, however, be expensive due to the interest rates, and finding your way out is essential. The ideal solution to get out of this loan is to pay it off. Look for ways to raise enough cash for you to repay off the loan. When you have enough, talk to your lender and request for payoff instructions. While some lenders accept payments, others will ask you to continue paying interest for a specified period. Either way, getting out of a title loan soon can help you manage your finances better.
If you lack sufficient cash to pay off the loan, you can consider swapping out your car. Selling the car to make some money is a wise move. This may not be easy since the lender has the title for the vehicle, but it is possible to sell. Selling the car can help you get some cash flow that you can use to make regular payments on your loan.
Try making your way out of a title loan by refinancing or consolidating. Replace it with another loan if you are sure about making repayments accordingly. Though taking a different loan does not solve your primary problem, it prevents you from accumulating high-interest rates on the title loan. Consider applying for a fixed rate loan from a credit union or bank. This could be less expensive compared to the title loan. Once you pay off your title loan, you can get back the title of your car and prevent repossession.
If you have difficulties getting approved for a different loan, you can consider options such as getting a co-signer to help you out. Peer-to-peer lenders can simplify the process of getting a loan with better terms. Alternatively, try negotiating with the title loan lender. Let them know the exact amount you can afford to pay for the loan. If your finances are messy, the lender might accept what you have to offer at the moment before things get even worse.
Request the lender to adjust the terms of your title loan. For instance, they could lower the interest rates to make it easy for you to pay up or make significant adjustments, which can reduce your overall payments. If the lender agrees to such changes, this can lower your credit score but make it easy for you to get back on your feet and pay off the loan.
Your last option would be to file for bankruptcy. Look for a local attorney to discuss your financial situation with them and get proper advice. This solution can offer relief for title loans. The car, however, continues to act as collateral for the loan. Failing to make repayments can lead to repossession of your vehicle. You can offer to surrender the car voluntarily if you don’t have a way of paying back the loan. Those this can affect your credit score; it can relieve you of monthly payments.