You have the vehicle and income to qualify for a vehicle title loan. This could a relief since you need cash right away to cover an emergency. But you’re wondering what might happen if you need a better rate or payment, or if it turns out you need more money. In short, you’re wondering whether you can refinance your title loan. The short answer is, yes, in some circumstances you can. Read on for more.
It’s a short-term loan that you take out for 30 days or less. Although longer terms are sometimes available.
To get one you’ll need a vehicle – car, truck, boat, RV, or motorcycle – and clear title, plus loan repayment ability. You also must use the vehicle’s title as loan security. However, you still get to drive your vehicle. This ability is a marked difference between title loans and pawn title loans. Pawn loans require you to leave your car with the shop until the loan is repaid.
Note, though, that if you do not make your payments if agreed upon, your vehicle can be seized. It will then be sold to cover losses. So, be sure about your repayment ability before taking such a loan out.
In addition to your vehicle’s lien-free title, you’ll need government-issued photo identification and proof of address. This could be a lease agreement, utility bills, etc. Some lenders will have other requirements.
You’ll also need to prove you can afford loan payments. If you have a job, such proof can mean bank statements or pay stubs. If you aren’t employed but have other regular income, from, say, Social Security, worker’s compensation, a rental property, a pension plan, or legal settlement, that would work, too.
In lieu of taking your vehicle in for appraisal, you must supply recent, quality photos of the vehicle from all angles. Also include clear shots of the odometer and vehicle identification number.
That will vary among lenders, but how much you’re offered will largely depend on your income and vehicle. The equity you have in your vehicle will be determined by its make, model, age, mileage, and general condition. Not to mention, factors such as style, trim level, and any modifications.
Loans tend to average around $1,000 and can vary between $1,000 and $10,000 and more.
The amount you can borrow may not depend on your credit history. Some title lenders will pull your credit, but because these loans are secured, they won’t focus on it.
Whether you wish to lower your rate or monthly payment, borrow more money, or are simply displeased with customer service levels, you may at some point say, I need to refinance my title loan. This would involve first paying off your existing loan. Either by yourself or having a new lender do it for you.
If you opt for the latter, you must again provide proof of income and residence. You'll also need the set of vehicle photos, plus professional or personal references.
If another lender has your title, a good title lender will be able to verify vehicle ownership and lien holders through the state’s motor vehicle bureau.
In addition to one that would facilitate refinancing, if need be, you would do well to work with one that will reward consistently on-time payments. Preferably with a lower interest rate, which will lead to a smaller monthly payment. Once the rate is slashed and you make payments as agreed, some lenders will cut your payment by almost half over the loan’s life. That’s akin to having your loan refinanced monthly.
So, yes, you can refinance your title loan, and a quality title lender will facilitate you. Ask about this possibility before signing on for a title loan to help you out of your crisis.
