Sometimes you need a little extra money to make it until payday. This has happened to all of us at one time or another. When you find yourself in a money crunch, a title loan can often be the perfect solution.
If you're considering this type of assistance to help you out of a tight spot, you'll also need to know how to get out of a title loan without losing your car. After all, if you can't pay, you might find yourself walking.
In this article, we take a look at how to deal with title loan debt when times are tough. Keep reading to learn how to keep from losing your car in this type of title loans situation.
Be Aware of Your Rights
Keep in mind that taking out a title loan is different from a typical auto loan when purchasing a car. Most vehicle financing includes what is known as the right of rescission, which essentially provides the consumer with the ability to simply return the car within two to three days if they have a change of heart.
But with a title loan, right of rescission isn't an option. So if you find yourself needing to get out of the title loan, you will have to do so by some other means.
Get a Long-Term Car Loan
The first option for getting the funds needed to pay off your title loan is to apply for a traditional long-term auto loan. This type of loan is generally quick and easy to secure.
The process simply requires you to go to your primary bank and fill out an application requesting a loan based on the current value of your vehicle. The key factor will be your credit score. It is never easy qualifying for a loan with bad credit.
The age and condition of your car will be major factors in determining the value of your car, and many banks won't lend money on older cars. So if your credit is less than stellar, and you don't have a newer car, a long-term loan likely won't be the solution you're looking for.
Refinance Your Home
Do you own your home? If so, refinancing your home or taking out a second mortgage could be another option.
Of course, this will only be possible if you have equity in your home. And again, you'll need good credit or for your bank to be willing to work with you.
Another drawback to refinancing your home is that this process could take 30 days or longer, which obviously won't help if you are needing cash quickly.
But if your credit is good, and are you able to take out more than you need to pay off the title loan, you could take advantage of the opportunity to consolidate debt and actually come out ahead.
Take Out a Personal Loan
This type of loan is typically available form local, regional, or national banks. Keep in mind that personal loans can be secured or unsecured.
For a secured loan, you'll need collateral, such as another car, a boat, or your home. And if you have adequate collateral, you might not be required to have perfect credit.
For an unsecured personal loan, there won't be collateral involved, but you might have to have good credit and can expect to pay a significantly higher interest rate.
But the good news with a personal loan is that you are typically granted up to 5 to 7 years to repay, which gives you time to get back on top of your finances.
Cash Advance on a Credit Card
If refinancing and personal loans are off the table for you, taking out a cash advance on your credit card might be a viable option. Depending on your credit limit and the type of cards you have, you could have anywhere from a few hundred dollars to thousands of dollars available.
The great thing about this type of cash advance is that you don't have to apply. The money is ready and available the moment you need it. Simply go to an ATM and take out the funds immediately.
The biggest drawback is that you'll likely be facing high-interest rates and fees if you don't pay back the advance by the end of the month or at least make the minimum monthly payment on the card.
Here is a resource where you can search for the best title loan to meet your needs.
Borrow Money From Family or Friends
This option might put you in an awkward position, but it's still worth mentioning. If none of the options listed above are available to you, it might be necessary to reach out to those people in your life who would be willing to help you out of a jam.
This is obviously not ideal, but if you have good relationships, many people are willing to step up and offer loved ones a short-term financial solution in the form of a cash loan. We recommend being very cautious about entering into this type of financial arrangement with friends or family because it could ultimately put the relationship in jeopardy.
Pay It Off With Cash
Do you have cash on hand? If so, the quickest and easiest solution for getting out of a title loan would be to simply pay it off with cash. This way you'll own your title free and clear, and won't be indebted to anyone.
Sell Your Car
This is obviously worst case scenery, but could ultimately be necessary. Selling your car would give you the cash to satisfy the title loan. So if you have another car and can live without the one you've taken out the loan on, selling it might be the idea to a solution to settle the matter once and for all.
Tips for How to Get Out of a Title Loan Without Losing Your Car
If you've found yourself in financial dire straights and need to know how to get out of a title loan without losing your car, the tips in this article can help.
The key is to not panic. Know your options, understand your legal rights, and then take the steps necessary to save your car and take back control of your money.
