Can I Pay Off a Title Loan Fast?
Life happens, and you may not have enough extra income to handle everything it throws at you. Car repairs, medical bills, and other unexpected expenses can easily knock you off your feet. One of the viable options for borrowing fast cash comes in the form of a title loan, also referred to as an auto title loan or vehicle title loan. Title loans are like comfortable beds: You can get into them easily, but you will need to get out at some point. If you want to learn how to pay off a title loan fast, the good news is that it is possible! Keep reading for more tips and tricks on how to effectively pay off a car title loan.
What is a Title Loan?
A car title loan is a type of secured loan where you provide the title to your vehicle as collateral to secure the loan. Since your vehicle title serves as collateral for the loan, the lender has the right to seize it if you fail to pay it off according to the terms of the agreement.
As long as you work hard to keep up with your payments, you’ll be allowed to keep driving your vehicle during the repayment process. But if you can’t manage your title loan payments, you might be searching for ways to avoid loan default and pay off a title loan fast.
What is Loan Default?
Loan default happens when a borrower fails to meet the terms and conditions outlined in a loan agreement. Simply put, it indicates that the borrower failed to make the necessary payments or violated other loan terms outlined in the loan contract. Loan default can happen with different types of loans, including mortgages, auto, personal, and title loans. Generally, a loan enters default after a certain period of time, sometimes 30, 60, or 90 days, depending on a few different factors.4
Best Ways to Quickly Pay Off a Title Loan
If you are trying to quickly pay off a title loan, consider the following strategies to stay on top of your loan and avoid default:
Set a Realistic Budget
Before you can learn how to pay off your title loan, you must create a realistic budget if you don’t already have one. With the right budget, you will be able to identify areas where you may be able to save some money by understanding your income and expenses.
To start creating your budget, write down everything you spend money on. This typically includes things like rent or mortgage, utilities, groceries, travel, and entertainment. Afterward, compare your overall expenses with your monthly earnings to see where you stand.
If your spending exceeds what you earn, then it’s time to readjust your budget. Try finding out how to minimize your monthly expenses, like preparing food at home instead of going out for it, using public transport instead of driving a car, or quitting unused subscriptions.
Make Additional or Lump Sum Payments
In some cases, paying off a title loan quickly is possible by making extra payments on your loan. That means you are essentially paying more than just the minimum amount due. Even small additional payments can significantly reduce the interest that accumulates over the life of a loan. A good approach is to budget money every month for your title loan and include multiple payments.
At times, you may receive unexpected money, such as a bonus, tax refund, or gift. Use this extra income to pay off your title loan all at once- but make sure you won’t run into any prepayment penalties.3
Borrowing Money from Family or Friends
To quickly pay off an auto title loan, you can also try to borrow from friends or close relatives. Although this strategy may be awkward and difficult sometimes, it may offer you an answer to your financial problems without the need to apply for a new loan. Make sure you come up with an agreement on how the repayment (if required) is going to be handled. Involving money in a relationship can complicate things, so make sure that you keep your promise to repay the money and be responsible for yourself.
Start a Side Hustle
Another efficient strategy to potentially speed up the repayment process of a title loan is to enhance your income through side hustles or part-time employment. This will help you earn more money to pay off your debt obligation. Consider freelancing, starting a side business, or getting temporary employment at a retail store to add to your regular income. Allocating this increased money solely for paying off your loan might help you pay off the debt faster.
Talk to your Lender
Failure to pay back the title loan can result in the repossession of your vehicle to pay off your debt. For this not to happen, it is important that you take advantage of the tips to pay off your loan. If you cannot make a payment, you should contact your lender or loan servicer to discuss your options and try to avoid repossession.
Consider Title Loan Refinancing
If you are consistently struggling to manage your title loan payments, it may be time to consider refinancing your title loan. You can try to refinance your title loan with a new lender or your existing lender! If you want to learn more about title loan refinancing, Max Cash is here to help.2 5
Just call 833-207-9052 to speak with a loan agent. They are available 24/7 to take your call and answer any questions about car title loans and other loan products! 2 5
