How Much Time Do I Have To Pay Back A Title Loan?

Most people take out a car title loan as a way to pay for an emergency expense. They think it will be a short term issue and fully expect to pay off the loan in full within a few weeks. But that’s not always what happens and it’s important to know exactly what the loan 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 back the loan will vary based on the regulations in your state and the loan term you agree to. In most cases the payoff time will be anywhere from a year to 4 years. Of course, you always have the option to pay off the full amount anytime to avoid the extra finance charges and annual percentage rate increases.

  • A payoff time of a few months to one year

A payoff time that falls in to this area will be recommended but also unique. You should do everything possibly to pay off the car title loan quickly to avoid the monthly interest charges which are excessive. 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 early payoff, but 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 monthly payments that are manageable but also aggressive to avoid a title loan that last for a matter of years.

  • A longer payoff period of one to four years

It seems that many applicants want to avoid a long term title loan payoff at first. But it’s difficult to make more than the minimum payment each month. It can get worse if you miss payments or fall behind over a few months. In this situation, you need to 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 end up making payments for years on end because of late fees and an increase in the annual percentage rate.

Come Up With A Title Loan Repayment Plan That Fits Your Budget

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, there are many who 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 payments each month on your title loan. But that doesn’t mean you should always make that choice. Consider what else is important to your financial stability before making a drastic decision. 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 the fact that most of us will be in the situation where we borrow more money that what’s needed. The same is true when you take out a car title loan and don’t have a plan to pay it back quickly. A longer term payoff will result in higher interest charges over the life of the loan and you run a risk of missing monthly payments or defaulting on the loan. Be sure to find the best terms that fit your budget and goals. Work with a legitimate nationwide loan company like Hyperlend that clearly lays out all your different financing options.
  • Most borrowers will be fine 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 as a way to bring down the monthly amount due. Of course, that’s not always the best financial decision, but most people in need of a title loan will take the lower payment every time!

Check with your neighborhood title loan companies to see if they have better payoff terms.
Ask yourself these questions once you decide an auto title loan is what you need:

  • How can I find a monthly payment that works for budget, but also allows me pay off the loan earlier?
  • Can I see a situation in a few months or longer that allows me to take care of the full title loan obligation before it comes due?
  • Am I confident I’m choosing the right title loan company? Will my lender work with me if I can’t pay back the title loan when it comes due?