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Auto title loan buyouts explained

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Like refinancing, it could help if you’re struggling to pay off your car equity loan.

Title loans can be an option when you’re faced with an unexpected bill or emergency, offering quick cash by putting your car up for collateral. But these short-term loans are notoriously expensive, attracting triple-digit APRs and high fees.

If you find yourself unable to keep up with payments through the end of your term, you may have an option beyond rolling over your balance into a new loan or, worse, losing your car. With research, you might find a title lender willing to buy out your existing loan, replacing it with another offering lower interest or stronger terms on the amount you owe.

Max Cash Title Loans

Our top pick: Max Cash Title Loans

With a quick online application, Max Cash could help connect you with a lender, finding you options in minutes.

  • Max. Loan Amount: $50,000
  • Loan Term: Varies by lender
  • Turnaround Time: As little as 1 business day
  • No bank account requirement.
  • Not available in 10 states: CO, HI, MD, MT, NE, NY, OH, SD, WA or WV.

    What is a title loan buyout?

    A title loan buyout is an agreement between two lenders offering title loans. To take advantage of a buyout, you find a title loan company willing to buy out your existing title loan, essentially paying off your existing title lender. Like refinancing, your new auto title lender then replaces your old title loan with a new one, ideally at lower rates or better terms.

    Many short-term title lenders and pawn companies specialize in title loan buyouts, though typically with terms of 30 days — not long if you’ve got a hefty loan to repay. If you qualify for a loan from a local bank or credit union, you can avoid short-term lenders altogether at a lower interest rate than most buyout companies can offer.

    How a title loan buyout works in 4 steps

    A title loan buyout starts with finding a lender willing to pay off your existing title loan at rates and terms that meet your needs. You provide basic personal and financial details to learn the interest rate, repayment terms and conditions you’re eligible for. After that, it’s a matter of signing your contract and paying your new lender.

    1. You sign a new loan contract with a lender willing to buy out your existing loan.
    2. Your new lender pays the full amount you owe to your original title loan company.
    3. Your new lender becomes the lienholder on your car title.
    4. You pay off your new lender according to the terms you agreed to.

    After you successfully satisfy your title loan buyout, you again own the title to your car outright.

    Compare auto title loans

    Rates last updated December 15th, 2018
    Unfortunately, none of the short term loan providers currently offer loans in your state. Learn more about short term loans in your state to find an alternative.
    Name Product Product Description Max. Loan Amount Turnaround Time Requirements
    Max Cash Title Loans
    With a quick online application, Max Cash could help connect you with a lender, finding you options in minutes.
    $50,000
    As little as 1 business day
    Must be a US citizen or permanent resident, 18 or older with a regular source of income.
    AutoTitleLoans.com Car Title Loans
    Quickly find a lender and potentially borrow up to $10,000 by using this auto title loan connection service.
    $10,000
    Varies by lender
    Have a regular source of income, not be involved in any bankruptcy proceedings, be a US citizen or permanent residence, be at least 18 years old (varies by state).
    LoanMart Car Title Loans
    A LoanMart auto title loan allows you to borrow money against your car, even if you have bad credit.
    $50,000
    1 business day
    Must live in AL, AZ, IL, MO, NM, SC or UT. Must have verifiable income, car value of at least $1,500 and a vehicle that is paid-off or close to being paid-off.
    Finova Financial Auto Equity Loans
    Short-term loans secured by your car title. Repayments accepted through MoneyGram if you don't have a bank account.
    $5,000
    as little as one business day
    Must live in AZ, CA, FL, NM, SC, TN or OR. Must own your car outright, have a valid car insurance policy and be a US citizen or permanent resident.
    TitleMax Auto Title Loans
    Auto title loans on cars and motorcycles to people in 16 states across the US.
    $10,000
    as little as 30 minutes
    Must have a lien-free vehicle title, government-issued ID, and be age of majority in your state.

    Compare up to 4 providers

    Title loan buyouts vs. refinancing

    While a few short-term lenders will advertise otherwise, a title loan buyout is very much like title loan refinancing. Both involve switching lenders or negotiating stronger terms with your current lender. Each can help you better manage your payments with less overall interest than you’d pay by not renegotiating.

    The difference lies in who they’re marketed to. Refinancing generally focuses on borrowers in good standing who are looking to save money on their title loan. Title buyouts are marketed to people who’ve fallen behind on payments or struggle to meet them.

    What are the benefits of a buyout?

    • Lower interest rates. A title loan buyout can get you a lower rate than your original loan, potentially decreasing the interest you’d pay over the life of your loan.
    • Longer loan terms. The ability to repay your loan over a longer period of time can provide you with breathing room to stay on top of your finances.
    • Avoid repossession. Finding a lender to buy out your auto title loan pushes off the possibility of losing your car.

    What should I watch out for?

    • The potential to lose your car. Whether a buyout or refinancing, your loan is secured by your vehicle. If you can’t repay what you owe, your lender can seize your car as payment.
    • High fees. Some lenders charge heavy fees for a title loan buyout. To avoid surprises, carefully read your contract.
    • More interest. Anytime that you extend your loan’s terms, you run the risk of paying more money in the long run.

    How to pay off an auto title and get out of costly debt

    A title loan buyout isn’t your only option when you’re unable to stay above water with an existing title loan. Before extending your debt, look into alternatives that include:

    • Asking loved ones for help. If you run the risk of losing your car, you might find a friend or family member willing to lend you money to pay off your loan. You can then work to repay what you owe at a pace and amount that better fits your income.
    • Request an extended payment plan. Your lender may be willing to rework your loan contract to extend your payment period, lowering your monthly payments and making it easier for you to repay your loan.
    • Negotiate with your current lender. Some lenders are willing to forgive a portion of your debt if you’re able to offer at least some payment up front. This option may affect your credit, but you’ll be able to keep your car.
    • Sell your car. It’s not an easy option, but you can sell your vehicle even with a lien on its title. If you can find a cheaper car, you can put any excess toward your loan, which may help settle your debt.

    Bottom line

    An auto title loan buyout is like refinancing your existing title loan for another at rates and terms that better match your budget, allowing you to keep your car. But be careful of high APRs and high fees.

    Before signing a new contract, read our comprehensive guide to auto title loans.

    Frequently asked questions

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    Kellye Guinan

    Kellye Guinan is a writer and editor with finder.com and has years of experience in academic writing and research. Between her passion for books and her love of language, she works on creating stories and volunteering her time on worthy causes. She lives in the woods and likes to find new bug friends in between reading just a little too much nonfiction.

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