An auto title loan is a great way to get the money you need in an emergency. By using the collateral in your car, you’re able to potentially borrow thousands of dollars and then repay the loan in monthly installments. But what if you find you can’t make the payments?
What Are My Options If I Can’t Afford My Current Loan?
If you already have an auto title loan but are struggling to make your payments, you have a number of possible options:
- Ask for a payment extension
- Ask for a deferment
- Ask for a due date change
- Ask for a rewrite
- Surrender the vehicle
- Refinance with another lender
What if I Can’t Afford My Payment This Month?
If you’re a little short of money this month, you could either ask for more time to make your payment or request a deferment.
The first option, asking for a little more time, will give you a few extra days past your regular due date to make your payment. In this situation, you’re making a “promise to pay” by a specific date and, although you may still be subject to a late fee, the lender will typically stop collections activity in the meantime.
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That means you shouldn’t get any calls or text messages to your phone until the date you promised to pay by. It’s worth bearing in mind that the criteria for allowing you to pay late will vary by lender; some will only allow it once, whereas other lenders will allow you to take this option multiple times.
Either way, a lot will depend upon your existing payment history and, if you’ve had an extension before, whether you paid when you said you would.
The second option, a deferment, allows you to defer the current payment until the end of the loan. In this situation, it allows you to take a payment holiday until next month’s due date, but it will also extend the term of your loan by a month.
What if I’m Having Long-Term Payment Concerns?
While both these options are great short term solutions, they may not help you six months from now. Fortunately there are two other options that might be a little more helpful in the long term.
A due date change can be very helpful if you change jobs and your pay schedule changes as a result. Many lenders won’t allow you to change your due date by more than two weeks; the reason is because when you first change your payment date, you’ll be accruing extra interest until you make the payment on the new due date.
That additional interest will either need to also be paid on the due date or paid in advance by making half a month’s regular payment when your due date change is approved.
If you’ve been making your payments for a while (typically over a year) and you have a good payment history, your lender might be willing to rewrite the loan. That’s when the lender reviews your account and lowers your annual interest rate, which, in turn, lowers your monthly payment. This is a great long term solution as it could lower your payments for the remainder of the term.
Surrendering your vehicle is really a last resort, as it means you’ll be giving your car to the lender, who’ll then sell it. If your car is worth more than the outstanding loan amount, then the loan will be paid off and you’ll receive the remaining proceeds from the sale.
However, if your vehicle doesn’t have enough equity, the lender may turn down your request as it may cost them more to sell the vehicle than the vehicle is actually worth.
Your last option then is to refinance the loan with another lender. Again, your vehicle needs to be worth more than your outstanding loan amount, otherwise the lender won’t be able to pay off your existing loan. The good news here is that you could potentially borrow a little more than you currently owe and have some cash in your pocket.
So which lender is the best option for when you’re looking to refinance your loan?
Introducing the ChoiceCash Auto Title Loan, Serviced by LoanMart
There are many auto title loans available to borrowers in the US, but not all of them offer the same great benefits as a ChoiceCash Auto Title Loan.2 For starters, you won’t have to wait long to get your money. You can be pre-approved in minutes and the whole process, from start to finish, can be completed in less than 24 hours.1 Best of all, it can all be done from the comfort of your own home.
Besides giving you the opportunity to potentially re-finance your existing loan at a lower rate, you could then lower your payments on a monthly basis.2
When you make your monthly payment on-time, your annual interest rate can be reduced and your monthly payment can go down as a result. 2 Not only does this allow you to save a little more every month, but it also helps to lighten the load by making it easier to make your payments. 2
If you’re looking to borrow more in the future, a ChoiceCash Auto Title Loan, serviced by LoanMart, can help with that too – and unlike other lenders, you’ll keep the same low interest rate you’ve worked hard to achieve on your existing loan. 2
Only going through a short term hardship? Once things pick up, you’re free to pay off a ChoiceCash Auto Title Loan at any time and with no pre-payment penalties. That way you can borrow and use the money for as long as you need it and pay it back as soon as you’re done.1
Regardless of whether you’re looking to refinance your existing loan or simply looking for the best auto title loan option, a ChoiceCash Auto Title Loan, serviced by LoanMart, can help.1 Don’t wait for your financial situation to get worse – call 855-914-2945 toll-free or visit www.choicecash.com to get started. It takes just a few minutes to find out if you’ve been pre-approved and you could get your cash today!