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Do you have an outstanding title loan without the money to pay it off?

This is a tough situation to be in. The title loan company will have your car title per the terms of your agreement with them, and if you don’t make your loan payments, they will likely repossess and sell the car. Obviously, you want to avoid this if at all possible.

There are a few options to consider, and choosing the right one will depend on your specific situation. We’re going to tell you the best way out of a car title loan in Texas, along with some alternatives.

 

The Best Way Out of a Car Title Loan in Texas – Pay It Off

Yes, it’s a simple solution and you’re probably here because you don’t think you can pay your title loan off. But we’re often capable of much more than we originally think we can do, provided we work hard enough or attack a problem from different angles. Here are some ways you could come up with the cash to pay off a title loan within the next 30 days:

 

1. Work Extra Hours

You never want to make working 50 or 60 hours per week a habit, because you’ll run yourself into the ground. But desperate times call for desperate measures, and if you have a title loan due, then it may be time to increase your workload so you can pay it off within a month.

If you have a job that allows you to work overtime, that’s a great way to make extra money at a higher wage. There are also quite a few apps and sites that allow you to make money on the side, including:
• Rideshare Services – Lyft and Uber are the two most popular, and if you drive at the right times, you can make several times the normal rates. Try driving on evenings, weekends and holidays, which are usually those busy times where you can make more.
• Postmates – You pick up products and people pay you to deliver them. It’s easy and a great side hustle.
• Airbnb – If you have a spare bedroom or even just a couch in your living room, you can rent it out.

 

2. Borrow Money

You may be wary of this solution, considering borrowing money got you into this situation in the first place. The first people you should talk to are your friends and family. Explain what’s going on and see if they can help you out. It’s not easy to swallow your pride and do this, but they may be willing to let you borrow money without expecting any interest in return.

There’s also the option of borrowing money from a lender, such as a bank or credit union. You’ll likely need at least a decent credit score to meet the minimum requirements. Check out online lenders and peer-to-peer lending programs, which sometimes have more relaxed requirements.

You’ll be taking out another loan, but it will have a much lower interest rate than your title loan, and the term will probably be longer. You can use that loan to pay off your title loan, and then pay back that loan on a schedule with set monthly payments.

Let’s say that you’ve tried all these and none of them worked for you. What else can you do? None of the following options are ideal, but they may be all you can do.

 

Negotiate with the Title Loan Company

The title loan company wants to get paid, which means most Texas title loans locations will work with you if you explain your situation to them.

The most likely result of talking to the title loan company will be that they offer to let you extend the loan, which is also known as rolling over the loan. Here’s how that works – you pay the interest on your loan. The title loan company extends your loan, and you start a new term of the same length with the unpaid loan principal. There will also be another interest charge.

The obvious downside to this is that you end up paying more in interest than you would have if you paid off your title loan on time. That’s the cost of extending your loan.

Of course, this can also lead to a dangerous cycle of debt, where you pay off only the interest each month and keep giving the title loan company money without even making a dent in your loan principal.

You could easily find yourself in the exact same situation the next month after extending your title loan. Figure out a game plan so you don’t continue going through the same pattern and losing money.

 

Sell Your Car

Is selling a car while owing money on a title loan allowed? The answer is a bit complicated.

You’re still the owner of the car, which gives you the right to sell it. But the title loan company has your car title during the term of your loan, and as long as they have your title, you can’t sell the car to anyone.

If you can find a buyer for your car, you would need them to go to the title loan company’s location with you. They could then give you the money for the sale of the car so you could pay off the loan, and then transfer the title to them.

Keep in mind that if you owe more on the title loan than a buyer is willing to pay for your car, you’ll need to spend money of your own to fully pay off the loan.

You may be wondering why you would sell your car if the alternative is having the title loan company repossess your car and sell it on their own. After all, you lose your car either way.

Although that’s true, it’s much better to sell your car than for the title loan company to repossess it for two reasons. The first is that if you default on the title loan, it will negatively affect your credit score. Paying off the loan by selling your car ensures that this doesn’t happen. The second is that if the title loan company repossesses and sells your car for less than what you owe, you’ll still need to pay them the deficiency balance.

 

Getting Out of Title Loan Debt

A title loan is like any other type of loan in that you should make sure you can pay it back before you apply. If you don’t have the money to pay off any type of loan, it can cause serious issues for you. You may rack up fees and end up with a lower credit core.

The best way out of a car title loan in Texas will always be to pay it off, however you need to do that. There are no shortcuts to get out of title loan debt. You just need to put in the work to make some extra money and pay it back or find someone to buy the car.