If you have dealt with unexpected expenses or just needed to fill the gap between your paychecks, it’s likely you’ve taken out a title loan. Title loans are an easy way to get cash from a car title without having to go through the stressful credit application of traditional bank funding. Texas title loan applications are very simple to complete and you can be approved in seconds.
How Do Title Loans Work?
If you are thinking about taking out a title loan or are unfamiliar with how your title loan works, we are going to go over this topic right now. Title loans are essentially a way for you to get a short-term loan by using your vehicle title as collateral. When you take out a title loan, you are given the loan agreement terms from your lender. These include the amount you can borrow, the interest rate you must pay, and the length or term of the loan.
You simply give your car title to the lender and receive your cash upfront. At the end of your loan term, you simply pay back the amount you borrowed plus the added interest costs. The lender will return your car title when your loan is paid back in full. It’s a very simple and straightforward process that allows borrowers to get the money they need quickly.
How To Refinance A Title Loan?
After you take out a title loan, you may find that you are paying a higher interest rate or monthly payment than you initially intended. In some situations, you may have experienced some financial difficulty that requires you to look into how to refinance a title loan for a better rate. Either way, by following the steps below you will be able to successfully learn how to refinance a title loan to meet your budget.
Step 1: Identify Your Existing Loan Terms
The first step in refinancing your title loan is to understand your existing loan. You should collect the necessary information below:
- Loan Term
- Interest Rate
- Payment Amount
- Total Payoff Amount
Step 2: Look Into New Lenders And Their Fees
Realize that you are trying to figure out how to refinance a title loan to help you have smaller monthly payments and a lower interest rate.
Just picking any random company and not evaluating their terms and fees can set you up to be stuck in the same or even worse financial situation than you already are in.
You should take a close look at each potential lender before deciding on the right one for your budget.
You should take the following considerations into account when analyzing each lender:
- Amount They Will Lend You
- Interest Rate On The Loan
- Loan Term Length
- Monthly Payment Amount
- Service Fees (ie. overdue fees, document fees, lender fees, membership fees, etc)
- Customer Service Ratings And User Reviews
Step 3: Assess All Available Information And Pick The Best Lender
When you refinance a title loan you are essentially receiving money from a new lender to cover the payoff amount of your existing title loan. The reward is that you will be set up to receive a better interest rate and lower monthly payments with the new lender than you did with your old title loan lender. If you aren’t receiving these rewards, there’s no point of switching to a new lender.
You should review the information that you collected above about your old title loan terms and all the new potential title loan lenders. Ensure your new lender meets the following title loan requirements:
1.) Provides A Loan Amount Equal To Or Greater Than Your Current Title Loan Payoff Amount
2.) Lower Interest Rate Than Your Current Title Loan
3.) Lower Monthly Payment Than Your Current Title Loan
Any potential lender should meet all three of these requirements. Good lenders will also have a great history of customer service and many positive reviews.
Step 4: Apply With A New Title Loan Lender
Now that you know what title loan lender is the best choice for you, it’s time to apply. Since your car title is in the possession of your existing title loan lender, it’s important that you share this information with your new potential lender. When you are approved for a title loan at the new lender they will payoff your existing title loan and take possession of your vehicle title.
You can get title loan help by checking out the many resource pages on this site. If you can’t find exactly what you are looking for, we encourage you to give us a call and talk to our 24/7 support staff.