Did you take out a title loan at some point to pay for a financial emergency? Title loans can be helpful, but we often see borrowers who get in over their heads with payments or APRs they can’t afford. The last thing you want to do is take out a loan to pay an urgent bill, only to be stuck with more debt from that title loan.
A title loan buyout may be an option for someone who’s overextended their monthly payments or worse for those who have already defaulted on the payments. You won’t want to deal with a vehicle repossession, but that’s the next step after a default, and a buyout can save you from losing the vehicle. With a title loan buyout, you find another lender to buy out or pay off the original loan.
To qualify for a title loan buyout, you must have an existing car title loan from another lender open to having the loan bought out or taken over. Even though you can be behind on the payments, you won’t likely be approved for a buyout if the vehicle has already been repossessed.
Your new lender will have similar requirements to what you’d expect when applying for a title loan the first time. That means you need equity in the vehicle, and you can’t be “upside down” on the payments. A standard credit check won’t be required, but we need to look for current bankruptcies and ensure you have enough income coming in monthly.
Both options allow you to replace the contractual terms of your original financing agreement. However, a title loan buyout does much more than lower your interest rate by refinancing.
The first difference is that when you refinance, you take out a new loan to repay your old one. Even though you only have one pink slip, you will have two outstanding loans simultaneously. A car title loan buyout, on the other hand, is when the company buys out your existing lending obligation. You will only have one loan outstanding after the buyout.
When you refinance, you should get a lower monthly payment or better repayment terms for a title loan with no credit check. A buyout may offer less favorable terms than a refinance, but it can be huge for someone already behind on their payments.
A buyout of an existing loan offers a chance to get real time relief on your monthly payment and APR. People turn to a new lender when they need assistance, and the title loan relief they are receiving isn’t enough to get back on track with the monthly payments. The new lender will want to see that you have maintained a decent credit score and have no more than two loans outstanding to approve your request.
Title loan buyouts can provide real-time relief on your monthly payment and APR, so people turn to this type of assistance. When you are current on the payments, a buyout can be the best way to lower the payments and quickly get a quicker repayment term.
When you took out the initial car title loan, you likely signed over the car title to your lender. That means they have a lien on the vehicle you’re currently driving and are the title’s legal owner. If you stop making payments on the title loan, your lender will start repossessing the car.
When you turn to a car title loan buyout, the new lender will want to transfer their lien to the new title. This means that your old lender’s lien will be released, and they will no longer have any claim to the car.
Most states allow loan buyouts and refinance, and it pays to see the available terms. You may be surprised at how much relief a title loan buyout can provide! Contact Texas Title Loans to see how much you’ll save with a same day buyout!