A title loan is a popular loan that many people look to when they need funding because it makes the lending process simple and offers flexibility for borrowers. If you have decided to acquire financial support through a title loan, but are having trouble paying, you may be wondering what happens next.
Here is some information on what to do when having trouble paying back your title loan.
Figure Out Exactly Why Are Having Trouble Paying Your Title Loan
Before trying to do something, it is crucial that you figure out exactly why are having trouble paying back your title loan.
Generally, there are three major reasons why most title loan borrowers experience trouble paying their loan:
The Terms of the Title Loan
In some cases, once a person has taken out a loan that they thought they could afford, they may later find out that it doesn’t fit their budget like they thought.
Their Own Financial Habits
In some cases, a borrower may find that their own financial habits are responsible for the trouble they are having when paying back their loan. This problem can stem from forgetting about due dates to not being able to stick to a budget.
An Unexpected Expense/Situation
In some cases, an unexpected situation or expense can cause trouble when repaying a title loan. This type of situation can be anything like losing a job to acquiring costly medical expenses.
What Can I Do If I Am Having Trouble Paying Back the Title Loan?
Once you have figured out exactly why you are having trouble paying your title loan, you can then figure out what steps to take.
Here are the most common actions people take when they are having trouble paying their title loan:
- Talk to Your Title Loan Lender—When having trouble paying back any loan, it is extremely important to keep your lender updated on your situation, no matter what the cause. This is especially true for a title loan, which involves your car. The great thing is that many lenders may be willing to work with borrowers to adjust the repayment terms.
- Consider Refinancing Your Title Loan—If the reason that you are having trouble paying the title loan is because the monthly payments are simply too high, then consider refinancing the existing title loan. The new loan can be a title loan or any other type of loan.
- Consider Talking to a Professional— If you are having trouble paying back your loan because of your own financial habits, you may want to look into a financial advisor. They can help a person organize, manage, and optimize their finances.
- Consider Making a Late Payment—If you miss one payment, or several, because you simply forgot, then you may want to consider just paying the late fees. However, it is important to keep in mind that missing payments will impact your credit, and so it is important to ensure paying late does not become a pattern.
How to Prevent Trouble with a Title Loan in the Future?
There are many things you can do to avoid trouble with your monthly title loan payments in the future.
Here are a few simple things to look into:
- Budgeting—This is an easy way to prevent trouble in the first place. Budgeting involves tracking expenses and income to effectively allocate money for specific monthly expenses–in this case, the title loan payment.
- Know the Ins and Outs of the Loan—Before signing up for any kind of title loan, it is important to know what repayment will look like and what the consequences are for late or missed payments. By knowing the ins and outs, you can be sure whether or not the loan will be affordable.
- Work with a Flexible Title Loan Lender—Even before taking out the loan, it is important to find a flexible and compassionate lender. At Max Cash, we work with all kinds of lenders and loan types. If you are thinking about refinancing your title loan or are thinking of acquiring a title loan for the first time, start with Max Cash!
If you are having trouble paying back your title loan, don’t panic! There are several steps that you may be able to take so the loan does not default! The most important thing a person can do is keep their lender updated on their finances. And to avoid trouble with any future loans, there are a few financial habits you can get into!