How to Get Out of a Title Loan

How to Understand Getting Out of A Car Title Loan

A borrower can use their vehicle’s title as collateral for a type of secured loan called a title loan. Title loans can cater to individuals with bad credit who need fast cash, making them a convenient option for Americans who may not be able to qualify for traditional bank loans. But when things go sour, borrowers may be searching for how to get out of a title loan and get their vehicle’s title back.

When someone takes out a title loan, they borrow against the available equity in their car. After the loan is funded, the title lender places a lien on the title to the borrower’s qualifying vehicle. If the borrower fails to make the required payments on their loan, the lender has the right to repossess and sell the vehicle to cover the unpaid loan balance.

People may apply for title loans for various reasons. Some of the most common reasons are that title loans have flexible application processes and often provide qualified borrowers with fast access to cash.¹ Additionally, title loans can appeal to borrowers who need a larger loan amount than what is typically offered by payday loans or cash advances. However, car title loans are not without potential risks, and the repayment process could be difficult if there is any unforeseen financial hardship.

If you currently have an auto title loan and need to get out of it due to financial stress, the recommended methods to reach your end goal are simply to repay your existing title loan, negotiate with your lender, or try to refinance your current loan to obtain more manageable payments. Continue reading to learn more about the ways you can get out of a title loan and the consequences of failing to meet your payment obligations.

What if You Don’t Pay Back an Auto Title Loan?

Generally, getting an auto title loan is a quick and relatively easy process, but what happens if you can’t pay your loan back? As mentioned above, if a borrower defaults on their title loan, then a title lender is allowed to seize the vehicle.

Defaulting on a loan can hurt your credit score if the title loan lender or loan servicer reports your payment behavior to one of the major credit bureaus. Life happens, and your financial situation might change while you are repaying an auto title loan online. If you have issues during the repayment process, make sure to immediately contact your title loan officer directly so that you are in a better position to discuss your available options. It’s important to reach out to the appropriate party prior to defaulting on your loan if you want the discussion to be as productive as possible.

How Do I Negotiate with the Lender to Get Out Of a Title Loan?

Negotiating with your title lender is one of the most valuable strategies to explore if you want to get out of a title loan. Still, it’s not the only option to consider if you need title loan relief assistance. By effectively communicating your current financial challenges with your lender and discussing your options, you may be able to find a solution that works for both parties.

Here are a few strategies to consider if you want to get out of a title loan without losing your car:

• Negotiating with the Lender: Start by contacting your lender and explain why you’re struggling to manage your title loan payments. Be open and honest about your current situation, emphasizing any hardships that have made it difficult to repay the loan. Most lenders are willing to work with you to find a solution that’s mutually beneficial and helps you avoid vehicle repossession.
• How to Request a Loan Modification: Sometimes, a lender will agree to modify the terms of your title loan. If you qualify for a loan rewrite, also referred to as a loan modification, your loan is typically re-amortized in order to make your payments more manageable.

Remember, when negotiating with the title lender, it’s crucial to be prepared and clearly understand your financial situation so you can effectively communicate why you’re struggling to repay your title loan.

What are Some Legal Considerations of Online Title Loans?

When facing financial difficulties and thinking about how to get out of a title loan, it’s important to understand all the legal considerations involved with a vehicle-secured loan. Defaulting on a title loan can have serious consequences, so it’s crucial to understand them before you stop making your payments.

As mentioned previously, one of the primary outcomes of defaulting on a title loan is the risk of vehicle repossession. Title lenders have the legal right to seize your car if you fail to pay back your title loan according to the terms listed in your loan agreement. Generally, title loan laws involving vehicle repossession can vary from state to state, so it’s important to do your research before you sign your agreement. For example, you may live in a state where lenders must provide advance notice before your vehicle is repossessed.

Be aware that there are laws in place to protect loan borrowers. As a title loan borrower, you are legally entitled to receive the written details of your loan agreement, including your loan amount, repayment period, interest rates, and your monthly payment.

If you can’t repay your title loan and are struggling financially, bankruptcy is an option to consider as a last resort. Filing for bankruptcy can provide temporary relief and potentially halt the repossession process. However, it’s important to note that this is not a permanent solution to your financial issues involving your title loan. While in active bankruptcy, the requirement to make your title loan payments may be paused or your payments may be reduced, and you can experience temporary financial relief. However the lien will remain on your car’s title until you repay your loan. Filing for bankruptcy is a decision that you should carefully consider, as it can have long-lasting effects on your credit and financial future.

What are Some Alternative Ways to Repay a Car Title Loan?

Now that you know more about how to get out of a title loan, you may be searching for opportunities to make some extra money because the simplest way out of a title loan is to just pay the full amount that you owe. But, in most cases, that’s easier said than done! If you have a need to find some other way to repay your title loan, you can try to use one of the following options to reach your goal:

• Get a Side Hustle: A side hustle, such as being a food delivery driver or taking a seasonal job on the weekends, is an efficient way to supplement your income and steadily repay your title loan over time. If you need help searching for profitable gigs, you can use websites like FlexJobs or TaskRabbit to find the best jobs near you to earn extra money this month.
• Ask Your Friends or Family For Help: Your loved ones may be willing to pay off the remainder of your loan and allow you to pay them back in installments over time. This option can complicate relationships, but you may not have to pay any interest!
• Explore Other Forms of Credit to Pay Off Your Title Loan: You can try to pay off your title loan through a cash advance from a credit card or a personal loan. However, you should only get a new loan product in order to pay off your title loan if the Annual Percentage Rate on your new loan product is lower than your current rate.

While you can try to get out of a title loan in many different ways, it’s important to thoroughly evaluate the pros and cons of each option and seek professional financial advice if needed. If you’re considering refinancing your title loan through ChoiceCash title loans, you can apply online now by completing a questionnaire or by calling 855-422-7402 to speak with a loan officer.¹

Can I Refinance My Title Loan to Pay Off My Debt?

If you’re trying to get out of a title loan because you can’t afford your current loan terms, you can consider a title loan refinance! Refinancing simply means receiving a new title loan with potentially improved terms to pay off the existing title loan. By refinancing, you may be able to secure more competitive interest rates or favorable repayment terms, making it easier for you to repay the loan.¹ You can try to refinance your title loan with your existing lender or attempt to refinance your title loan with a new one.

The process of refinancing a title loan isn’t complicated, and it’s quite similar to the process of applying for a car title loan! Here is the streamlined, three-step process you’ll have to go through in order to refinance your existing title loan:¹

1. Apply for Title Loan Refinancing Online or Over the Phone
2. Submit a Few Documents to Verify Your Information
3. Sign Your New Title Loan Contract if You Qualify!

By refinancing your existing title loan through a ChoiceCash title loan serviced by LoanMart, you can access exclusive perks, including flexible loan terms and exceptional customer service!¹ Contact a ChoiceCash title loan agent today at 855-422-7402 if you have questions about car title loan refinancing.