Editor's choice: Max Cash Title Loans
- No bank account required
- No prepayment penalty
- Bad credit OK
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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.[/fin_read_more]
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.
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.
After you successfully satisfy your title loan buyout, you again own the title to your car outright.
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.
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:
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.
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