Car Title Loans: How to Avoid a Repossession

As with any other collateralized loans, car title loans pose the risk of repossession. This is because the vehicle is used to secure the loan. If the loan is not repaid, the vehicle becomes subject to repossession.

Oh well, time to throw your hands in the air and forget about borrowing, right? Not so fast. Those who wish to take out auto title loans near me open today can take steps to avoid a repossession. This way, they can still borrow money without losing their means of transportation.

Let’s take a closer look at the risk of repossession and how you can avoid it when taking out a car title loan.

Risk of Repossession

First, let’s consider the risk of repossession in the car title loan industry. Do a lot of people end up losing their vehicles?

Most people do not go through a repossession when taking out a car title loan. Studies show that vehicles are repossessed 4 to 8 percent of the time. This means that over 90 percent of car title loans are issued without the vehicle being repossessed.

Also, many people neglect to consider that car title loans are less risky than other collateralized loans – such as home equity loans – in some ways. Just think about it: would you rather risk your vehicle or your home?

How to Avoid a Repossession

Having to look over your shoulder for a repo man isn’t a desirable situation. So, you may wish to take steps to avoid this relatively minor risk. These include the following:

Work With a Trustworthy Lender

Research a few lenders on the Internet. Check them out with the Better Business Bureau at BBB.org and through your own searches. By doing so, you’ll help ensure that you’re dealing with a company who’d rather give you a reasonable car title loan than repossess your vehicle.

Take Out Only What You Need

Just because you qualify for $10,000 doesn’t mean that you should take it all. For example, if you need money to pay for a $4,000 medical bill, take out $4,000 – just enough to pay the bill.

Pay Installments on Time

Be sure to make your payments on time. Doing so will keep your interest payments down and the lender will have no reason to repossess your vehicle.

Try to Pay Ahead of Schedule

It is necessary to pay your loan installments on time. However, if you are in the position to do so, begin paying ahead of schedule. This will help you pay it off faster and, once it’s paid off, there will be no chance of a repossession.

You may wish to confirm that this is OK to do with your lender.

Renew Your Loan

Life happens. If something comes up and you cannot make your monthly payments on schedule, consider renewing your loan. You’ll have to pay extra interest, so this should only be considered if you have an unexpected problem making payments. In other words, don’t take out a car title loan knowing that you can only afford it if you renew it

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Alternative Car Title Loans Will Assist Failing Budgets

Could you utilize the fast cash from a car title loan to make up for lost wages? Taking a few extra days off to enjoy the holidays with family and friends may have been a great idea in the beginning, but if illness cause you to lose additional days, how will your finances bounce back from days without pay?

Those living paycheck to paycheck will be negatively impacted by the loss of income. Short-term loans are often used as emergency means of funding a budget. The down side to payday loans and cash advances is that these loans are usually only for a few hundred dollars. They do not always fill the void. When you own your vehicle outright, a title loan will provide a larger amount of quick cash to fill the empty account. Whether it provides money to get by till the next paycheck or to make up for lost wages, a car title loan is one more option to those who have fewer resources for financial security.

Temporary financial problems often promote long-term credit issues. Negative reports to the credit bureaus are preventable through the use of short-term money solutions. Car title cash is not an option for just anyone. If a financial institution owns the title or if there is a lien present on it, you will not qualify for a title loan. Most car title loan lenders will list qualifying information needed right on their website or call and ask a customer representative. The money comes to you faster if you are prepared with all necessary documents.

No one wants to do business with a shady operation. Unfortunately in the short-term loan industry, there are many players waiting to take advantage of financially vulnerable people. Do some research on the business and good loan practices before signing any kind of document? It doesn’t hurt to have “3 call” minimum; meaning, look into three different companies and compare their practices. What do they look for in order to qualify an applicant? What are their collections practices? No one truly plans on not paying, but just as one emergency can destroy budget costs, think what a second consecutive one would do. How do you recoup from a double punch to your bank account?

Preventative measures are a great ways to prevent the need for short-term cash, but most people struggling paycheck to paycheck do not have the extra to place in a savings. If someone had room on credit cards, they will probably not be int he car title lot to begin with. Revolving credit options are much safer to utilize rather than a secured loan. It’s those hard workers who do not have available credit at their disposal end up using alternative financial means. Car title loans are available to those who need a no credit check loan. The simple and fast process will alleviate your financial stress quickly. Be aware of payoff expectations before you sign for the loan in order to prevent any future problem