Before COVID-19 hit, if you had taken a title loan to cash fast and pay off your debts in the future, then you might be stuck with a bad title loan. Perhaps, you might be paying only interest with nothing going towards the principal you borrowed in the first place.
Do you know getting rid of these high-interest fees and monthly payments with your lender is now easy? Getting down with the right lender will help you save a fortune on little things like title loans.
Title loan buyout or more commonly known as a title loan refinance, is the best way to get better terms on your loan. When a lender purchases your existing title loan, he/she pays off your current lender in exchange for a new loan. This is similar to the refinancing process for securing a lower interest rate.
But before understanding how buying out these advances works, let’s answer “How do title loans work”?
Typically, it begins with the application process for advance online or at a lender’s store. The lending amount varies from 25 percent to 50 percent of the concerned object’s value. For that, you need to have the title of that object in your hands.
Suppose, to commence and culminate the application process and get approved; you are required to bring in your car or motorbike, proof of insurance, a clear title, and a photo ID. Then, you repay the principal along with the interest amount.
Buyout- How Does It Work?
When seeking a buyout, rest assured this process is simple and easy. You just have to find a lender who is willing to pay off your existing title loan; who also provides basic personal and financial details to learn what interest rate, conditions, and repayment terms you qualify for. Then sign a contract with the best terms and lower rates possible. The new lender will thereafter become the lienholder on your car title and pay off the loan to your original title loan company in full. And you pay off the new advancer as per the terms in the agreement you signed.
You will regain full ownership of your car once you satiate the terms of your title loan. This way, you will be out of debt faster than you possibly thought, with lower monthly costs and interest rates.
While buying out is easy, the process of finding the right lender and everything in the vicinity is a bit tricky. So, read here certain things that you should watch out for during the buying out process.
- With lower monthly payments, some money lenders charge higher interest rates.
- They may also lower your monthly payment but will lengthen the loan, potentially costing you a fortune.
- Despite offering better terms, some are not good in terms of their customer service and company culture.
- Some scammers would not approve and create problems if your vehicle has been repossessed.
Is Title Loan Buyout the Right Choice?
When considering certain options, look closely at your current title loan. You might notice a very high-interest rate. Then, quickly call the prospective lender and ask if you are eligible for lower rates. Upon finding the right interest rate that suits your pocket, enjoy immediate savings and start paying down your debts once for all.
However, if you don’t find one, don’t default on your existing title loan and continue paying until you find someone who is willing to buy out your advance. Otherwise, you could have your car repossessed or be dragged to court.
Takeaway
Correct your mistake and get someone to buy out your title loan with a higher interest rate and short-term limit. There are several one-stop shops for lower rates, longer terms, and better customer service, so get in touch with one right away.