When auto title loans first appeared in communities everywhere, they were very specific about what they provided and how things would proceed for borrowers. While specific is still a word you can apply to these non-traditional lenders, the terms with many of these companies has changed. The terms continue to change, too, evolving in ways that are even more helpful to consumers/borrowers. See for yourself, and then ask around in your community about some of these title loan changes.
Some title loan companies have been offering "refinancing" plans. This allows borrowers to keep their vehicles without risk of loss, and still manage to make timely payments on what they owe. You have to go into the title loan office on or before the due date of your loan and ask if you can refinance. There is usually a minimum repayment required before a refinancing is allowed, typically a third to half of the loan. If the title loan place allows it, and if you qualify, it can relieve some of the pressure of the loan and loan repayments by making the loan payments smaller and easier to pay.
Buying the Vehicle Back
If your vehicle is seized by a title loan company, they usually sell it to recoup their losses. Some companies are now allowing consumers to buy the vehicle back, if consumers can come up with the remaining payments within a short period of time (e.g., two weeks, a month, etc.). This is good news for anyone or any family that only has one vehicle and relies heavily on that vehicle to go to work and make the money that pays the bills. It means that you and other consumers would only have to be without a vehicle for the time it takes to make enough money to buy back the vehicle from the title loan company.
Offering Multiple Loan Levels
In this instance, a title loan company will initially make several offers to the consumer. It might be structured like two grand borrowed at a lower interest rate, followed by five grand at a higher interest rate, or even more money at an even higher interest rate. The repayment terms may be just as variable as well. The idea behind these "offer ladders" is to get people to borrow responsibly, borrow only what they need, and repay with easier repayment terms so that they can keep their vehicles.
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