Most people take out an online title loan as a way to pay for emergency expenses. They expect to pay the loan in full within a few weeks. But that’s not always what happens, and it’s essential to know what the payoff terms are so you can plan your budget and make extra payments. In most cases, the payback amount and length will be agreed upon by you and the lender before the title loan contract is signed.
The length of time to pay off a typical auto title loan will vary based on the regulations in your state and the loan term you agree to. In most cases, the payoff can be anywhere from a year to 4 years. Of course, you always have the option to pay down the loan at any time to avoid the extra finance charges and annual percentage rate increases.
How To Pay Off Your Car Title Loan
A payoff time that falls into the range of 12-18 months is average and probably the most desirable. It would help if you did everything possible to pay off the car title loan quickly to avoid the excessive monthly interest charges. But, the facts state that most borrowers are already financially stretched before they take out an online title loan in the first place. It’s best to shoot for this payoff time and set a budget that allows for an early payoff. Still realistically, it will be tough to get out from under a long-term debt obligation in a few months or even a year. Work with a secured lender to come up with manageable monthly payments to avoid a lending term that lasts for a matter of years.
Avoid a longer payoff over two years for any car title loan offer.
Many applicants seem to want to avoid a lengthy payoff of their car title loan at first. But it’s challenging to make more than the minimum payment each month. It can worsen if you miss payments or fall behind over a few months. In this situation, you must work with your lender to avoid a prolonged default and possible vehicle repossession. Some consumers will take out a loan expecting to pay it back in a few months, only to make payments for years because of late fees and an increase in the annual percentage rate.
What are the benefits of paying off a car title loan early?
Short Term Loan Payoff
- The goal is to set yourself up for success so the title loan payments don’t cause problems with other important payments like your mortgage and insurance. While some people may find the shorter payment period quite stressful because of the pressure to come up with a larger sum of money in a short period of time, many choose this payment duration because of the lower interest rate. However, many online title loans last for a few months because most borrowers are able to pay off their debt fast.
- You may be in a situation where you can make extra monthly payments and pay off the loan before the due date. But that doesn’t mean you should always make that choice. Consider what else is essential to your financial stability before making a drastic decision and do what you need to avoid a title loan repo or any other situation where you may default. Consult with a registered financial advisor to map out a yearly budget and decide your order of loan payoffs.
Longer Title Loan Payoff Term
- There’s no getting around that most of us will be in a situation where we borrow more money than what’s needed. The same is true when you take out a car title loan and don’t have the plan to pay it back quickly. Paying off your online title loans over a longer period of time will result in higher interest charges over the life of the loan, and you run a risk of missing monthly payments or defaulting altogether. Be sure to find the best terms that fit your budget and goals and also allow you to get your cash quickly. Work with a legitimate nationwide company like Hyperlend that clearly lays out all the financing options and also allows you to refinance a title loan.
- Most borrowers will be OK with a longer payoff time if that means their monthly payment will be lowered. Consider if you were looking to purchase a car or home and the lender offered to stretch out the term by a few years to bring down the monthly amount due. Of course, that’s not always the best financial decision, but most people needing an online title loan will take the lower payment every time!
Get Help To Pay Off A Title Loan Online
Believe it or not, there are ways to get help if you can’t pay off your title loan on time. Some lenders will work with you to develop a repayment plan that works for your financial situation, so it’s always worth trying to talk to them if you find yourself struggling. Others will allow you to pay off your loan early, either as a lump sum payment or by making additional monthly payments at a lower interest rate while also not charging a pre-payment penalty.
Of course, many lenders will work with you for these reasons only if you reach out to them first. So if you find yourself unable to pay your title loan on time, it’s important that you contact your lender immediately and explain the situation. Often, they will be able to offer you some helpful solutions that can help get you back on track.
Questions to ask if you want to pay off a title loan before the due date:
- How can I find a monthly payment that works with my budget, but also allows me to pay off the loan earlier?
- Can I see a situation in a few months or longer that allows me to pay off the full title loan obligation before it comes due?
- Am I confident I’m choosing the right company? Will my lender work with me if I can’t pay back the loan when it comes due?