You’ve got to pay your rent by the end of the week, or you won’t have a home anymore. You’re strapped for cash with nowhere to turn but a loan. So, you grab your car title and the extra pair of keys and start the process toward getting a car title loan.
What you didn’t realize was how bad the interest rate was going to be. Now you find yourself in an even deeper rabbit hole of debt. You’re having trouble even knowing how to repay the loan.
You know that if you don’t do something soon, you’re going to lose your vehicle. We can help you avoid this worst-case scenario. Keep reading to learn more.
What Is a Car Title Loan?
A car title loan is a loan that will allow you to get anywhere between 100-5,000 dollars in a pinch. The catch is that you have to put your car up for collateral.
It’s usually required that you hand a copy of the car title and an extra pair of keys to the lender. If you’re interested, you can go here to learn more about the requirements. For now, we’re going to move on to paying off the loan.
Earn a Little Extra Cash
The first thing you should do when you have to pay off a loan is to see if there’s any way that you can earn extra cash. You can get a little side job. Doing food delivery won’t help you pay off all your bills, but it can put more money in your pocket.
Go around your home and look for anything valuable that you don’t need anymore. You could sell it on an app or take it to a thrift store.
Debt Settlement
Let’s say that you can’t afford to pay off the entire title loan, but you can pay a good chunk of it. The loan company cares way more about getting their money than they do about taking your car.
They may be willing to settle your debt for the amount that you can pay. If the lender agrees to this arrangement, make sure that you get it in writing. If you don’t, they may try to charge you more later on.
Refinance
Your last option is to get a lower-cost loan and use the money to pay off the title loan. Before you take out the new loan, read over all the fine print.
You want to make sure that it’s going to be affordable and come with a reasonable interest rate. Otherwise, you’ll find yourself in the same spot in a few months.
Repay the Loan and Get Yourself Out of Debt
Taking out a car title loan seems like a good idea until it comes time to pay it off. The good news is that if you do find yourself overwhelmed, there are ways for you to repay the loan and get back on your feet.
Consider taking on a side job, and if all else fails, ask for a debt settlement or refinance. For more information on cars and loans, feel free to explore the rest of our blog.