Title Loan Relief
For many consumers, a title loan can provide welcome financial relief during difficult financial times. Among the biggest benefits of a title loan is the ability to qualify for a loan regardless of your credit situation and the ability to receive a loan quickly. While it often takes at least several days to complete the application process for a bank loan, with a title loan you could be approved and have your loan funded within one business day. Despite the advantages, consumers sometimes find they can't pay title loan payments. When that happens, borrowers often begin looking for title loan relief assistance. The good news is that there are options available to consumers who find themselves experiencing trouble in making their title loan payments.
How Title Loans Work
In order to understand how to obtain title loan debt relief, it’s first important to make sure you have a solid understanding of how title loans work. When you take out a car title loan, you are borrowing money against the title to your vehicle. In exchange for a loan, you provide the lender with the title to your vehicle as security or collateral. This gives the lender the right to take your vehicle and sell it if you do not meet the terms of the loan, including making payments on time. Title loans are typically short-term loans ranging from 120 days to one year. As is the case with any other type of loan, when you take out the loan, you are agreeing to the terms of the loan. If you fail to meet the terms of the loan, you could face serious consequences, including potentially having your vehicle repossessed by the lender.
In some instances, you simply may not be able to make the payments on your title loan. If that should happen, it is important to make sure you understand your rights and available options. Additionally, you need to take action as quickly as possible.
Title Loan Refinance
If you realize you are not able to pay your title loan, the first step should be to contact your lender. Keeping up to date on your payments is in the best interest of you as well as the lender. As soon as you realize there may be a problem, it is a good idea to contact the lender and ask about a hardship option (refinancing title loan). With this type of option, you can usually restructure your title. Keep in mind that this type of restructuring is only temporary. You will not be relieved of making your payments, but this strategy could help you to catch up with your payments and avoid having your vehicle repossessed.
Whenever possible, title loan repossession should always be avoided. Having the lender take your vehicle to pay off your loan would deprive you of a source of transportation and make it difficult for you to commute to and from work and handle family responsibilities. Once your vehicle has been repossessed, there is little recourse available to you.
Refinancing Your Title Loan
Unfortunately, many people never seek title loan relief options because they either do not know they exist or believe they would not qualify to refinance their title loan. As a result, they find themselves trying to balance debts they cannot pay. This can put consumers at risk for having their vehicles repossessed. Refinancing your vehicle title loan can help to ease your difficulties during trying personal financial challenges. The process works by adjusting the rate of repayment for your loan based on your current situation.
The first step in refinancing your title loan is to collect all necessary documents. It’s better to have collected these documents in advance of applying to refinance your title loan. Doing so can help to save you a tremendous amount of time and make the refinancing process go much smoother and simpler. You will need official documents related to your vehicle, including the title of the vehicle and a copy of the original loan documents. In addition, you may also need a certificate of inspection that details any repairs or adjustments that have been made to the vehicle since the time the loan was originally made.
Next, you will need to know the current payoff for the loan in question. This is the amount that will need to be repaid in order for the loan to be paid in full. Keep in mind that a current payoff amount is usually only good for a few days. You should contact your lender directly in order to obtain a current payoff amount. In addition, be sure to ask exactly how long the quote will remain valid.
In some instances, you may need to confirm your credit score. This will depend on the title loan relief lender with whom you are seeking title loan assistance and whether that lender requires a credit check in order to refinance your title loan. You may need to provide authorization to the prospective lender for them to perform their own credit check.
Some lenders will offer different repayment plan options. If you are experiencing trouble in paying your title loan, it is important to carefully evaluate your budget and be realistic about what you can afford to pay. Review your financial situation and consider what your situation is likely to be for the entire time of the repayment plan. It is vital that you not overextend yourself and commit to payments that you cannot afford to make. If you need assistance with determining how much you can realistically afford to pay, consult with your title loan relief lender.
Keep in mind that there is no reason to feel embarrassed about falling behind on your title loan. There could be many different reasons for not being able to make your payments, including losing your job, medical issues, or personal problems that have made it hard to keep up with your payments. The important thing is to not avoid the issue but instead to work to find a manageable solution. Understanding your rights, title loan regulations, and possible alternative options can help you to make the most informed decision about the best way to handle your title loan.
Title Loan Repossession
Without some type of title loan relief assistance, you could be at risk for losing your vehicle, if you fail to make payments on time. When you do not make your title loan payments, the lender has the right to repossess the vehicle and sell it in an attempt to recoup their loss. According to the Federal Trade Commission, some states have laws in effect that require lenders who have repossessed and sold your vehicle to pay you the difference between the loan amount and the sales price. In other states, lenders are allowed to retain the full amount from the sale of the vehicle.
Title Loan Regulations
When it comes to title loan rescue and relief, there are some regulations in place to protect consumers. For instance, vehicle title loans offered to members of the military and their dependents are required under federal law as well as special Department of Defense rules to include special protections. Since October 1, 2007, the military APR for vehicle title loans is not allowed to exceed 36 percent and the term for such loans must be 181 days or less. Most charges and fees must also be included in this rate. Additionally, lenders are not allowed to require access to bank account or a check for the loan. Creditors are also prevented from using unreasonable legal notices or mandatory arbitration. Furthermore, military borrowers must also be provided with specific disclosures regarding their rights and loan costs. Any credit agreements that violate those regulations are considered void. If you feel that a lender violated legal regulations and special protections to which you are entitled, it is important to seek legal assistance as quickly as possible.
For some consumers, even restructuring a title loan may not be the best solution. In such cases, you may find that seeking some other form of title loan relief is the better choice for your specific situation. One title loan rescue option would be to take out another loan at a lower interest rate in order to pay off your title loan. While many lenders do offer competitive title loan interest rates, those interest rates are typically higher than what you would normally pay for a standard bank loan. This is due to the fact that there is not a credit check required and the title lender is assuming more risk by issuing a title loan without a credit check. This is particularly true if you happen to have bad credit and/or have had serious credit issues in the past.
Unless the lender violated legal regulations, there is usually not a way to get out of a title loan. With that said, there may be alternative financing options that can help you to lower the payments for your title loans, making them more affordable and manageable.