As helpful as car title loans can be, especially for borrowers who don’t have the best credit and have very few other loan options, there’s also a risk involved if the borrower doesn’t have a plan to repay the loan. If you end up in this situation, it could lead to a cycle of title […]

As helpful as car title loans can be, especially for borrowers who don’t have the best credit and have very few other loan options, there’s also a risk involved if the borrower doesn’t have a plan to repay the loan. If you end up in this situation, it could lead to a cycle of title loan debt where your loan principal stays the same while you keep making interest payments to keep the loan going. One way you can clear this hurdle and get the title loan help you need is with a buyout program. A title loan buyout is when one lender pays off your original title loan company for you, and you then pay that new lender. When done correctly, this can save you money. Here’s how you can make it work for you.

How a Title Loan Buyout Works

Before getting into the title loan buyout process, it’s important to fully understand everything that goes on when you get a title loan.

Your title loan is a secured loan taken against your car, and car title loan lenders assess your eligibility based on your car’s value. To get one, you must own the car outright and have its title. The title must not have a lienholder on it, and your name needs to be on the title.

The car’s title is used as collateral for securing the loan, allowing lenders to bypass a thorough credit check.

The reason that there can’t be a lienholder on the title is because when you get a title loan, the lender becomes the lienholder. There can only be one lienholder on a car title at any one time.

When you get the title loan, there will be a few important details to note:

• The length of the term, usually 30 days

• The interest rate which varies by state and lender

• The total amount due.

Now, if you have a current title loan that you haven’t been able to pay back and it has a high interest rate, you can look for title loan buyout options. This is essentially a way of getting title loan help by refinancing.

To do this, you’ll look for companies that pay off title loans. Many title loan companies will also offer this service, and we can find them for you in our network of lenders. You’ll provide the lender with some basic information just like you would if you were applying for a title loan.

The lender will evaluate your situation and then determine what interest rate and loan terms it could offer you. If you agree to the title loan buyout, then this lender will go to your original title loan company and pay the entire amount you owe on your title loan. At that point, the new lender becomes the lienholder on your car title.

Benefits of a Title Loan Buyout

The main way that you benefit when you have a lender buy out your title loan is that you can secure a lower interest rate and spend less money on your monthly payment.

For example, let’s say that you originally got a $1,000 title loan that has interest of 23 percent each month. You then find a lender willing to buy out your title loan and give you an interest rate of 15 percent per month. You’re saving 8 percent per month, which is $80 on a $1,000 title loan. If it takes you six months to pay off title loans, that’s almost $500 in savings on your monthly payments.

Deciding if a Title Loan Buyout Is Right for You

A title loan buyout can be convenient, but only in the right situation. You should ask yourself the following questions before you pull the trigger on a buyout:

1. How much longer would it take you to pay off your original title loan?

2. What will the interest rate difference be between your original title loan and your refinanced title loan?

3. How much do you have left to pay on your original title loan?

The point of all these questions is to decide whether the money you could save with a title loan buyout would be worth going to a new lender to set it all up, especially if you have an existing loan. It’s not difficult to get your buyout, as the process is almost as quick and simple as getting a new loan in the first place.

But still, it doesn’t make much sense to go through the effort of refinancing your title loan with a new lender if you won’t save a substantial amount in interest, either because the interest rate difference isn’t that much or because you’ve already almost paid off your original title loan.

If you could realistically pay off your original loan within the next month or two, it’s typically also better to just do that instead of going through the title loan buyout process. However, if you find yourself struggling, you might consider the option to refinance my title to better manage your financial situation.

Weighing Your Options

Think you may need title loan help with a buyout or title loan refinance? We can help you find the right lender. All you need to do is fill out our simple buyout title loans online application with your car’s info and your basic contact info. One of our helpful representatives will get in touch shortly to go over your buyout options and explain the title loan refinancing process. You could have your title loan refinanced by the end of the day and answer any more questions about title loans you have.

Car Title Loan Laws by State

Vehicle title loans — sometimes called car equity loans — are secured loans that use the title to a car you own as collateral, and car title loan refinance options are available in many states. Title loans are unique for two major reasons:

1. You don’t need to be employed. You do need income, but it can be from an alternate source like disability payments or unemployment insurance.

2. You don’t need to have good credit. Nearly all car title loan companies skip the credit check. This means you can qualify with poor credit, slow credit and no credit.

In some states, title pawn loans are also available, but they come with their own set of regulations and potential consequences.

Auto Title Loan Laws by State

Title loan lending is governed at the state level, which means each state writes its own laws about how title lending can be operated. At the time this article is being written, title loans are legal in 21 states, according to the Center for Responsible Lending.

Maybe you are wondering, “Can I find title loan buyouts near me?” well, it depends on the laws in your state and your existing title loan. Laws vary by state, and some states regulate how much interest can be charged on existing title loans, like in Florida. Others state that the title loan lender must clearly display interest rates and finance charges in their offices, like in Texas and South Carolina.

Many people worry, “What happens if I don’t pay a title loan?” In most states, the lender can take your car and sell it recover costs. States like Virginia require lenders to pay any amount recovered during the sale that is above the costs of the loan.