There are often times when things become tight financially, and you find it hard to make ends meet. In these situations, it can feel as though there are no available options. You can feel especially pressured if your financial history hasn't been too great, either.
Poor credit scores can make it extremely difficult to get a loan. On top of that, loan applications are often in-depth and time consuming. When you're not sure if you'll have enough money to pay your bills at the end of the week, you don't have time to figure out the complicated loan processes that banks often enforce.
Luckily, Texas Approval offers title loans to ease your financial pain. Title loans are a special kind of loan that uses your vehicle as collateral instead of your financial history. These loans are great for those with little or poor credit history and are also much easier to apply for than traditional loans.
However, regardless of how simple and easy title loans can be for people in financial trouble, there are still circumstances where those who receive a title loan may find they are unable to pay it back. It is incredibly important for these people to avoid defaulting a car title loan, as defaulting can result in repossession which can then cause many following issues in the future.
Thankfully, there are ways for you to avoid defaulting a car title loan if you find yourself unable to make the agreed payments. There aren't many ways, but they do exist and it is important to make yourself aware of them to save even more problems down the road. The main reason people end up defaulting on their title loans is because they don't know that help is available to them in the first place.
Plan ahead. Although easier said than done, the best way to avoid default is to properly plan ahead for your debts. Having money saved ahead of time for at least three months of payments can save you if you happen to lose your income while in the middle of paying back a title loan.
Make your payments. Of course, the next obvious way to avoid defaulting a car title loan is to simply make the agreed payments on time. This is even more easier said than done compared to proper planning because if you had the money to pay the loan, you probably wouldn't have taken it out in the first place. However, there are situations where you may find yourself in a better financial situation after taking the loan out and are able to pay it off. If this does happen, you should immediately speak with your lender to come up with a finishing payment arrangement.
Sell your car. The previously mentioned methods are not always viable options for many people who are trying to avoid defaulting a car title loan. The fact of the matter is that if you are trying find out how to avoid default, you're probably close to it happening already and are past planning ahead or are unable to make your payments. In those situations, one method could be to sell your car. This may be very difficult without a clean title, but it is possible. You can use the money to pay off the remaining balance and purchase a cheaper car that will save you more money over time anyway.
The last method to avoid default is to seek out title loan relief. Relief assistance is something that not many people know exist, or they think they wouldn't qualify for it. However, there are many places out there that can help you pay back your title loan. This involves refinancing or consolidating your original loan into a new one. Of course, doing this does not actually solve the problem; rather, it simply prolongs it. However, it can give you more time to straighten out your finances and be able to pay back the loan yourself.
Before seeking out relief assistance, there are a couple of things you must do. First, you should gather all of your relevant documents regarding the title loan. This may also include any papers for your car or repairs that have been made to it. Doing so will save you a lot of time when you get ready to actually apply.
You should also figure out what the payoff balance is for your title loan. The payoff is the amount required to be paid in order for the remaining loan balance to be taken care of. You should contact your lender directly for this in order to get an accurate quote. You should also find out exactly how long the quote will last for, as many will only be accurate for a couple of days.
After you've gathered the necessary information in order to seek relief assistance for your title loan, you should also take a good look at your budget. Be reasonable and realistic with yourself and figure out what you are actually able to pay. Make sure you take a look into the future and see how things will be financially for you during the entirety of the repayment plan. Because this is a refinancing of an original loan, this is the time for you to plan properly and make better decisions regarding your budget.
When approaching default, you may also be able to negotiate with your lender and figure something out together. They may be able to work with you, depending on the circumstances surrounding your title loan situation. In order to do this, you should be honest about your budget and approach your lender with a good idea of how much you will be able to pay.
With that said, it is likely that your credit score will be poorly affected if your lender agrees to take less than what was previously agreed upon that you owed. You'll be back in the same situation you were in before with a poor credit score for several more years, however dedication to good budgeting and financial planning can fix that as well.
In the end, regardless of what method you take, you should look at things very carefully when approaching default. Be honest with yourself regarding the reality of your situation and the things you are able to do to take care of it. These things happen, but they are serious and should therefore be treated as such.
You should also not feel embarrassed about your situation. Over three quarters of people living in the United States of America live from paycheck to paycheck. In reality, your situation is actually part of the majority. With that said, it's nothing you can't make it out of. With a good, hard look at your budget now, you can save yourself from a lot of problems in the future.
Avoiding default on your title loans may seem impossible, but really all it takes is a little work. When you find yourself approaching default, all hope is not lost. However, you should handle the situation diligently as defaulting on your title loan could result in repossession of your car. With the advice given, you should have no issues.