How to Refinance a Title Loan

Something unexpected came up and you took out a vehicle title loan to see you through. Fast forward to now, and you’ve found that the terms or payments have become unmanageable, or that you need more money. Well, some lenders will allow you to modify your loan through refinancing, which would give you a new start. To help you, here’s how to refinance a title loan – and more.

Describe Vehicle Title Loans

These are short-term secured loans that use your vehicle – car, truck, RV, boat, or motorcycle – as collateral. On the one hand, this means high approval rates since you’re less of a risk. But on the other hand, you must make your payments, or your vehicle will be seized and sold. So, first make certain you can do that.

How Much Can I Get?

That varies among states and lenders, but in general, you can expect to receive between 25% and 50% of your vehicle’s value. Loans are typically for between $100 and $10,000 or more.

In deciding how much to lend, title companies consider factors such as the vehicle’s make, model, age, mileage, and overall condition. While some lenders will look at your credit scores, they won’t focus on them. Therefore, you can still be lent funds even with subpar credit.

Will I Have to Relinquish My Vehicle?

No. And that’s a prime benefit. As long as you’re making payments, you may use your vehicle as usual. The lender will hang onto your vehicle title, but only until the loan is repaid.

What Do These Loans Require?

Again, this can vary, but in general, you can expect to have to provide a government-issued photo ID and proof of residence. You also may be asked to submit proof of vehicle insurance and personal or professional recommendations. Further, you’ll need recent photos of the vehicle you plan to collateralize from all four angles, plus a clear shot of the odometer.

The Benefits of Title Loans

We’ve noted some of them, but here are the top benefits:

  • Doable payments. Title loan payments are generally manageable. That’s by design since lenders do not want to go to the trouble of seizing and selling your vehicle. If you’re having trouble making your payments, however, continue reading for information about possible title loan refinance.
  • Longer terms. You might require more time than, for example, what a payday loan offers for repayment. In such cases, a title loan may be the better fit. Even the provision of more time might necessitate a refi, which is the process of revising and supplanting current agreement terms.
  • Competitive interest rates. Rates for other loan options may not be affordable. Title loan interest rates are established based upon up-to-date market analysis.
  • Quick cash. If you’re looking into an auto title loan, you likely need immediate help. That’s where title loans shine.

What About Refinancing?

If you’ve discovered that you simply cannot manage your payments or terms, or that you need more money, or that your lender’s customer service leaves much to be desired, you may want to pursue refinancing.

If you’re seeking a lower payment or interest rate, you may want to reach out to your lender to see if they’d be open to altering your terms. You lender just might drop your rate, which will lower your payment, if your payment history is excellent.

If don’t or can’t go through your current lender, you may be able to refinance your loan elsewhere. For that to happen, though, you must clear your existing loan. It depends on the laws of the state the lender’s in, but you can either erase the balance yourself or find out whether another leader will take care of that for you.

Ultimately, when it comes to how to refinance a title loan, it depends on your situation and your satisfaction with your current lender. But it’s important that you know that refi may be an option.