Many things could have occurred since you took out a title loan on your cherished vehicle. You might have found a better job and eliminated all of your debt. If you purchased a vehicle and agreed to high-interest terms and your credit score has since improved, you may want to look to refinance your vehicle title loan with TitleMax.
You might pay off the loan with a lower interest rate if you refinance your title loan, which could end up saving you a lot of money over time. Refinancing your title loan with TitleMax has some advantages even if you don’t pay a lower interest rate.
If you are having trouble paying back your title loan, refinancing it could offer you lower-cost benefits and prevent you from getting into more debt.
What is a Title Loan Refinance?
Title loan refinancing involves taking out a new loan to pay off the balance of your existing title loan. This refinance option is usually chosen to save money by reducing your interest rate on your monthly repayments.
Usually, when someone takes out a title loan to pay for their car, they do so with a fixed interest rate and predetermined repayment schedule. Typically, these repayment terms range from 60 months to five years. The interest rate, payment schedule, and terms of the initial contract will be altered when a refinance takes place.
When a borrower applies to refinance an existing loan, their credit terms and credit score are typically reviewed. Mortgage loans, auto loans, and student loans are all examples of refinance loans. Usually, the goal is to pay off the loan with less interest overall or switch from fixed-rate terms to an adjustable-rate mortgage (or vice versa).
Advantages of Refinancing Your Title Loan
Cash-Out
If you’ve been paying off your car and making your payments on time, you might already have some equity in it. Therefore, if you refinance, you might receive a cash payout.
If the value of these assets is greater than the balance owed on your existing loan, the new loan will be offered based on the current value of your car.
Shorten the Terms of Your Loan
If you find yourself in a better financial situation than when you initially took out your online title loan, you may benefit from shortening the repayment terms under which you took the loan. Paying off your title loan faster means paying a lower interest rate over the life of the loan and you might stand to save yourself thousands of dollars.
Lower Your Monthly Repayments
You might experience a setback in life, as it often does, and find yourself in a situation where you need to reduce your monthly expenses. You can refinance your current title loan to shorten the repayment period and lower your monthly payments.
You will typically have to pay more interest over the course of your loan if you refinance, but it could help you free up some monthly cash to get you through the difficult period.
Disadvantages of Refinancing Your Title Loan
Despite the fact that you might benefit from a decrease in your monthly repayment costs, you will ultimately pay more over time. Particularly when it comes to vehicles, which lose value over time instead of gaining it
According to experts, a car can lose up to 45 percent of its value in the first three years, so refinancing could result in you paying more than the car is actually worth.
As a result, when you refinance a car loan, you risk adding negative equity to your new loan and increasing the difference between what you own and what your car is worth.
Types of Refinance Loans
How Do I Qualify for a Refinance Loan?
A lender will base its offer of an interest rate on two things:
Your Credit Score
Generally, a credit score follows the FICO (Fair Isaac Corporation) model that rates a potential borrower’s creditworthiness on a three-digit rating from 300 to 850.
According to FICO, the ratings are as follows:
Your Debt-to-Income Ratio
By dividing your monthly income by your monthly debt payments, they arrive at this figure.
What are the Costs of Refinancing My Title Loan?
Before choosing to refinance your title loan, one should always be certain of the terms of the loan. Some lenders impose a prepayment penalty and other unstated fees for early loan repayment.
Always request an APR (Annual Percentage Rate) from your lender, taking into account all penalties and additional costs.
When taking out a refinance loan, reregistration fees must also be taken into account, and potential savings must be weighed against all the extra expenses that are included in the repayment terms.
Can I Refinance My Title Loan with TitleMax?
TitleMax provides title loan refinancing with competitive interest rates. TitleMax will take into account the value of the asset and your current loan. TitleMax is typically willing to refinance any title loan. However, they do require:
| TitleMax Auto Title Loans | |
| Min. Amount | $2,600 |
| Max. Amount | $10,000 |
| Loan Term | 30 days |
| Loan Security | Secured |
| Turnaround Time | as little as 30 minutes |
| Requirements | Must have a lien-free vehicle title, government-issued ID, and be the age of majority in your state. |
Conclusion
Make sure that you are aware of your financial situation and that renegotiating your title loan will benefit your long-term financial situation before deciding to do so. Even though it can be tempting to take a cash out in order to refinance, one should always prioritize long-term gains over immediate ones.
Shop around for lenders with the most competitive rates and be vigilant about hidden costs. If refinancing your title loan is an option for you, find a reputable lender like TitleMax to guide you through the process.
FAQ
When you refinance a car loan What happens to the title?
When you refinance, a new title needs to be issued. It follows that their name will no longer appear on the title. The new title will show the new lienholder. Your state’s department of motor vehicles is in charge of this process.
What is the downside to a title loan?
The drawbacks of car title loans include the possibility of losing your means of transportation if your loan defaults. That’s because the car serves as the loan’s collateral, and the lender has the right to take possession of that collateral in order to recover losses.
Can you negotiate a title loan?
Negotiate the loan terms Rather than paying off the debt, you might be able to get a better deal on the loan terms. Ask for a longer loan term, a lower interest rate, a lower monthly payment, or a combination of all three. Be certain you can afford the new terms, and have all the details documented in writing.
Does TitleMax use tracking devices?
Titlemax uses GPS tracking devices to monitor a car’s location. These gadgets are typically mounted on the vehicle, enabling real-time tracking of its movements. Additionally, they also use license plate numbers to track cars.