Online title loans have high interest rates and can be difficult to repay according to the set payment terms. That’s why you should always try to repay your loan early. Make more than the minimum payment each month or pay off the loan altogether if you have the ability. Doing that, you’ll get your vehicle’s title back earlier and pay far less in interest over the life of the loan.
Why Should I Pay Off My Title Loan Early
Car title loans often have higher interest rates than installment and personal loans. According to our title loan calculator, you could pay $250 in interest to borrow $1,000 for 30 days. Of course, the rates are higher because most companies won’t obsess over your credit score. Instead, they want to know if you have enough vehicle use as collateral for the loan. But if your loan has no early payment penalties, you can save money by paying the balance off before it’s due.
Most direct title loan lenders charge high rollover payments fees, making it even harder for cash-strapped borrowers to pay them off. About 20% of borrowers will see their vehicle’s repossessed because of lack of payment. Don’t find yourself in this situation. Work with your lender to repay the full balance anytime you have extra cash!
Ways to money to pay off your title loan fast and early
- Borrow money from a family member. Although it’s difficult to talk to loved ones about finances, borrowing money from family can help you get back on your feet and will cost less than rolling over your loan.
- Refinance. If you have decent credit, you can refinance your car title loan into a personal loan with a longer-term and lower interest rate.
- Get a side hustle. Pick up some freelance work or sign up for gig apps to earn extra money for your loan.
- Sell valuables. Parting with treasured belongings is difficult, but selling valuables can help you get out of debt and avoid losing your car.
- Reevaluate your budget. Take a look at your budget and make sure it’s as lean as possible. Cut out any unnecessary expenses like takeout and subscription services.
- Settle your debt. If you don’t have enough money to repay your loan in full, some lenders may allow you to settle your debt for a smaller lump sum.
- Negotiate new terms. If the online title loan lender doesn’t settle your debt for a lower amount, see if you can negotiate new terms like a more extended repayment period or a lower interest rate to make the loan more affordable. You’d be surprised at how many companies will negotiate new terms, even for no income verification vehicle title loans.
How Much Time Do You Have To Make Extra Payments For Car Title Loans?
Car title loans usually have more significant interest rates than other types of loans. Even if you repay the balance per the loan terms, getting your pink slip back can take months or years. That’s why you should contact your lender if you have extra cash that can be used to pay down the loan balance. Do this within a few days or weeks of knowing you can make an early payoff. Consider refinancing the amount owed or working with the lender to devise an alternative payment arraignment. With these strategies, you may be able to come up with the extra money you need to discharge your loan on time or even ahead of schedule.