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It is no longer news that millions of Americans take out title loans every single year, up to 2 million people. One reason why you’re here on this page is whether you’re looking to get out of a title loan you have or you’re curious to know before you jump in on that offer. Fortunately, we have good news for you as there are lots of companies that pay off title loans.
You might be looking for a way to clear your Title loan and yet not know what it really means, here is an explanation.
What are Auto Title Loans?
A title loan is simply a secure loan but with a very high interest rate and a short time payment schedule made for car owners.
Car title loan lenders need you as a borrower with a vehicle that has enough equity that can be used as collateral. As simple as this sounds, some title loan lenders do not give the borrower access to their car to drive during the loan payment period. Actually, there are some title loan lenders that don’t need you to have a car before being granted a loan.
Once you are approved for a loan, the car title loan lender will sign onto your car title as a lienholder. A lienholder simply gives the lender partial ownership of the car, a lender being a lienholder of the car gives them the right to repossess the borrower’s vehicle if the borrower defaults on or fails to repay the given title loan. Taking a look back at a case study done in 2012, it shows that less than 10% of vehicles used as collateral in title loan are repossessed by lenders.
I don’t know if you noticed that I have been using different names for the title loan from earlier, this might look confusing but it is not. Title loans go by different names, but I assure you we are all talking about the same thing.
Different Names you might hear or see include:
- Vehicle title loan
- Car title loan
- Pink slip loan
- Auto title loans and others.
Just as there are advantages to getting a Car title loan, so are disadvantages attached to it.
Advantages of a Car title loan
- It is available to almost everyone, even if you have low or poor credit.
- Comes with quick approval and fast fund disbursement.
- You don’t need a co-signer or guarantor as your vehicle is collateral.
- Flexible repayment options can be offered to you, depending on the lender.
- It is easier to find a title loan to apply for.
Disadvantages of a Car title loan
- You can lose ownership of your vehicle upon default.
- Comes with high interest, which is usually too painful.
- There are always hidden fees e.g. prepayment penalties or balloon payments.
- Repayment time given is usually short and may aid unwanted default on repayment.
- You risk signing up with a dubious or scam lender.
What does it mean “Title Loan Buyout”?
During the process of being unable to pay your title loan, a title loan lender takes your existing title loan and incorporates it into a new loan deal. This shows that the borrowers are tasked with bigger expenses, take on a title loan, and need up to months in order to repay the loan, they face the risk of expanding their expenses and monthly repayments bigger than they can handle.
When a loan goes big, the borrower may start to miss out on repayments leading to default on the loan, this in the sense of bringing a solution would be refinancing a title loan instead of defaulting on the existing title loan.
Now that I know what a Title Loan BuyOut is, is there a way for me to get it and are there companies that pay off title loans? Let’s talk about that.
How to Get a Title Loan Buy Out
Applying for a title loan buyout is no different from applying for a regular loan, but how? Here is how title loan refinancing is laid out;
Start with going to the office of the lender, which could be a physical office or an online website either way, get an application and then fill it out. You must make sure to secure a loan amount bigger or equal to the balance left to pay on your existing title loan.
After this, you get your loan approval status, if approved, sign the necessary documentation and get your money, once gotten, pay off your title loan and be free, this means you get to avoid late repayment penalties.
Are there Companies That Pay Off Title Loans?
“Are there companies that pay off title loans” has been your question from the start, yes companies do accept to pay off Car Title loans and there are different loan companies ready to buy out title loans. However, there are some requirements; Credit score, financial management, General income, and other factors, depending on the companies you come across, there might be differences in their preferences. Below are some lenders you may look up to for a title loan buyout;
Banks – When looking for a title loan buyout, banks are the first option to pop up but do know that banks do require you to have a good credit score and a clean loan history, if you have a bad credit score or have defaulted on many loan in the past due to bankruptcy, you may find it difficult to secure a loan with banks.
Private lenders – Just as the name describes, a private lender is directly in contact with you through the whole process, they may be able to clear off your existing title loans. Being a direct lender, they offer different loan products such as personal loans, installment loans, payday loans, and other bad credit loans. Depending on who you’re registering with. The requirement ranges from flexible to medium.
Credit Unions – Another way to clear your title loans is using Credit Unions, a credit union is a financial institution owned by a number of debtors. Just as we looking at clearing your title loans, the credit union consists of borrowers, this leaves you in a good spot with opportunities that can provide a workaround for your title loan.
Now that you know Companies That Pay Off Title Loans, you should know about the benefits of car title loan refinancing.
Also Read: DSCR Loan No Down Payment – Facts You Must Know Now
Perks of Auto Title Loan Buyout
Being in spiraling debt is heartbreaking, what’s more painful is when there is no solution, but with a title loan buyout you can easily organize your finances with less stress. Here are the benefits you get to enjoy with a car title loan refinance.
Easy Payment Plan
One of the best things about a title loan buyout is the affordable payment plan, it is not unknown to us that title loan terms are mostly brief and concise, in some cases, the lender’s payment might not be in your favor, thus, a title loan buyout is to your rescue, with better rates when your financial records like credit history and income are in good condition.
Impressive Service
If you’re working with a lower standard lender on improving your financial conditions, you might experience difficulties, you’ll be able to get rid of the stress when you look at the option of a car title refinance connects you with a new lender to work with in improving your financial situation.
Lower Interest Rates
Using a title loan buyout will help you get a better interest rate, but this will depend on financial factors like your credit history, and income, you will be able to match up lenders that will offer you a better annual percentage rate.
Extra cash
When you opt for the option of refinancing your existing loan, you might be able to get some cash to use personally, if you use the part of the fund to cover your existing loan. This is part of the benefits you get to enjoy with title loan financing.
Boost your Credit Score
Using the title loan buyout is advantageous to you in the sense that you can boost your credit score, just make sure you pay your loan installments timely, and the credit bureaus will be able to accredit this act.
Conclusion
Seeing that there are companies that pay off title loans is exciting news for a borrower, you can break your debt cycle and embrace a new financial freedom in peace. Whenever you are looking for a lender to refinance your title loan, make sure to do your own research to avoid unexpected complications.
