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Title loans are a type of secured installment loan that require the use of the borrower’s vehicle title as collateral. If you’re interested in inquiring for a title loan, you may wonder, “How are title loans paid back?”

Check out all of the features you should know about title loans before finalizing your loan decision.

How Are Title Loans Obtained?

Title loans offer flexible qualification requirements for borrowers, which allows individuals with low or unestablished credit to confidently inquire. There are two main qualifying factors, including the car and the ability to repay the loan.

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Title loans are typically flexible with the types of cars that are accepted as collateral. As long as the car has enough equity, it may be deemed eligible for collateral. One quick and easy way to check if the car has enough value is to use an online title loan calculator.

Income is also very important for title loan eligibility. As long as the potential borrower receives consistent income and the loan can be paid back without difficulty, they may qualify.

How Are Title Loans Paid Back?

If you are approved for a title loan, you can start planning how the loan is going to be paid back. Every month, your loan payment will be due on the same day. Luckily, you have many convenient options for title loan repayment.

Title loans are usually paid back through these methods:

  • Pay online through your title loan account
  • Pay over the phone using a credit/debit card
  • Set up a one-time payment or recurring payments from your bank account
  • Make your payment at a participating money transfer location
  • Send a check or money order to the payment processing center

The title loan process was designed for simplicity with hassle-free steps. Even when a title loan is required to be paid back, a borrower is not inconvenienced.

If you ever experience issues with repayment, ensure that you talk to your title loan agent as soon as possible. There may be options available to you.

How Long Are Auto Title Loans For?

How long the length of a title loan is usually depends on the amount of the monthly payment you can afford. The shorter the loan term, the higher the payment. The flipside of this is a longer loan term means more interest that you will pay.

Here is some advice if you’re uncertain about which type of repayment schedule is best for you, and what some of the common terms are:

In deciding how long you should take to pay for car title loans in Columbus or your city, you need to ask yourself the following questions:

  • How long can I realistically pay for the loan without upsetting my budget?
  • Where will I be six months from now? A year from now? Three or four years from now? How will this impact my capacity to meet my financial responsibilities?
  • What sort of lifestyle changes can I make to generate enough funds to make a significant monthly payment?
  • How much am I able to adjust my monthly budget to afford the monthly payments?
  • What are the chances of my being able to make advanced payments to shorten my payment period and thereby avoid paying for some of the interest rates?

These questions are very important in deciding how long you want to pay for your loan. Answer each one carefully and weigh the pros and cons of your decision. Decide on the factors that matter to you the most so you have a clearer picture of which loan repayment term will be most appropriate for your situation.

If you are sharing the payments with another person (but the loan was made under your name), by all means do involve this other person in deciding on the repayment schedule of your shared obligation – especially if he or she will also benefit from the loan amount.

If you find it overwhelming to make such a big decision or are unsure if you are choosing the best possible option on your own, you might also want to take it up with your loan officer. Together, the two of you can decide which schedule will be the best one for you. Remember that loan officers are not just there to process your application and receive your payments.

They are also professionals who are trained to problem solve with their clients to come up with an agreement that will be most manageable for them. With LoanMart, the end goal is to provide enough support so that the client will be able to meet his or her financial obligations in the form of loan payments.

Advantages You’ll See when Title Loans are Paid Back on Time

When title loans are paid back in a timely manner, you could receive financial benefits! Inquiring and obtaining a loan requires you to go through a hard credit check, which may lower your credit score and appears on your credit report.

Although this is a necessary step of the loan process, you could use it to your advantage. After all, when a title loan is paid back on time each month, payments may reflect positively on your credit! Every bill you pay could only further help the way your credit is calculated. On-time monthly payments may be reflected on your credit report.

How Much is Owed when Title Loans are Required to be Paid Back?

The amount you owe when your title loan needs to be paid back is dependent on your income, how much you borrowed, and how long you have for repayment.

However, you should know that title loan payments are typically affordable for qualified borrowers. When a title loan is paid back, you are not left with pennies in your pocket. A lot of loan options require large monthly payments because collateral is not used. With secure title loans, the use of collateral could allow you to reap extra benefits such as lower payments.

Can a Title Loan be Paid Back Early?

If you have a title loan, you might wonder if it can be paid back early. Depending on the type of loan you obtain, you could be charged penalty fees for paying it back early. When a loan is paid back earlier than agreed upon, the lender loses out on interest fees. For this reason, some loans come with prepayment penalties.

Title loans do not usually have prepayment penalty fees. This means that if your title loan is paid back early, you can save on interest and become financially independent much quicker!

Loans after Bankruptcy

Declaring bankruptcy may help settle your debt and stop phone calls and letters from debt collectors. Whether you file for Chapter 7 or 13 bankruptcy, this last resort option may help you get a fresh start. But, it’s a fresh start that comes with a lot of consequences. One of the biggest is trying to apply for loans after you have declared bankruptcy.

Whether you file Chapter 7 to discharge debts, or filed for Chapter 13 to use a 3-5 year plan to pay off your debts, the fact that you filed for bankruptcy can affect you long after your debts have been actually paid.

The bankruptcy laws and codes were originally set up to give people with debt a second chance, not to punish them. However, there’s a cost to everything. In this case, bankruptcy carries some long-term consequences because it will remain on your credit report for 7-10 years after filing no matter what. When your credit report has the equivalent of a big, red “bankruptcy” stamped over it, it can be very hard to get loans or be approved for any line of credit no matter your current financial situation.

But, at LoanMart, we offer an alternative to these traditional lenders that will probably turn you down as soon as they see the word bankruptcy. At LoanMart, your past doesn’t matter as much.

How We Look at Bankruptcy

previous bankruptcy or bad credit history may not hurt your chances of qualifying for an auto title loan, since our auto title loans in Dallas and many other places are more heavily based on the value of your vehicle and your ability to repay.

If you have a current bankruptcy proceeding, you may need to get permission from the court to obtain a loan from us.

We will decide if we can lend you money based on your ability to make payments now. With respect to bankruptcy, we look to see if you are in credit counseling, have an active bankruptcy or anything else that might affect your ability to pay a loan.

We’ve been able to help people with all kinds of situations in the past that have to do with bankruptcies and we may be able to help you too.

How We Look at Credit

Similarly, your credit score might be badly affected by a past bankruptcy whether it’s still on your report or not. At LoanMart we also have solutions for loans for those with bad credit, due to a bankruptcy or otherwise. Unlike other types of loans, credit is not a major deciding factor for us when we’re making loan approval decisions.

What is Defaulting on a Car Title Loan?

When you have a car title loan, most lenders make you repay the loan every month. If you start to miss your monthly payments and continue to miss them without any communication to your lender, the delinquency can result in car title loan default. A car title loan default is the failure to repay a loan according to the terms agreed upon in your contract.

LoanMart does all we can to make sure that defaulting on your loan is the last event to happen. Other lenders make themselves unavailable or not understanding, while LoanMart makes ourselves accessible to our customers and helps you get yourself back on the right track. We may be able to adjust payments with customers to fit their lifestyle, circumstances, and budget.

How Many Title Loan Payments Are Missed to Default?

Rules regarding defaulting and repossession can vary depending on the state you live in. Most contracts with lenders will say when the missed payments are considered defaulting, and how long the borrower has to contact the lender before they repossess the vehicle.

LoanMart stays in contact with their customers to ensure you do not default on your loan. We don’t want you to have to handle the stress that comes with defaulting on a loan, so we make sure to be in contact with you when you have missed a payment.

What Happens When You Default on Car Title Loans?

Because you are using your vehicle’s title as collateral for your car title loan, a lender is permitted to seize the vehicle at any time without notice, which could possible mean coming onto the borrower’s property to do so. The lender then repossesses the vehicle, typically taking it to a tow site.

With some lenders, you may be able to get the money you owe to the lender before they repossess the vehicle, but after the car title loan has defaulted. Some lenders may even send a notice of repossession to give you the chance to pay off the loan.

With LoanMart, the last thing we want to ever happen to you is for your car to be repossessed because of a default on your car title loan. Our customer representatives are available to answer your calls 7 days a week. While some people may feel afraid to talk with their lender when they are close to defaulting, we encourage you to contact us to make arrangements.

What Happens if Your Car is Repossessed?

Once the borrower’s vehicle has been repossessed, the car title loan lender can choose to sell the car at an auction. Any of the money that they acquire from the auction will go towards the remaining balance of the loan. If the auction gives more money than the loan is worth, the lender has to give the remaining money from the loan difference back to the borrower that defaulted on the loan. If there is any property within the vehicle, the lender must return it to the borrower.

If you are currently working with a lender to try and fix your defaulted loan, but they are not supportive or encouraging, LoanMart can help you refinance your loan with your other lender1!

LoanMart works with our customers so repossession is the last resort. It is the last thing we want to do. We believe it is more beneficial for both customer and company for the life of the loan to be completed without any problems. That’s why LoanMart provides customers with the resources to understand what happens when you default in order to prevent it or give customers options to solve it. We encourage calls from our customers who are struggling with payments, or from customers of other lenders who want a better service.

How to Start the Title Loan Process?

To start the streamlined inquiry process for a title loan, all you have to do is complete an online questionnaire or call toll-free at 855-422-7412. By answering a few basic questions about your car, such as the vehicle year and model type, you could quickly receive a pre-approval decision.

The title loan approval process was made for convenience, so only a few steps are necessary. Take a look at how the process usually unfolds:

  • Inquiry: Inquiring for a title loan is quick and easy. You may decide to call or establish contact online. This step only requires basic information about your car and some contact details.
  • Paperwork: If you are preapproved for a title loan, you can proceed with turning in your documents. Generally, you will be asked to provide documents that verify your identity, address, income, and car ownership.
  • Approval: After a title loan agent verifies your information, you can be fully approved for emergency money! You will be asked to sign the agreement and you will learn how your loan can be paid back.

Title loans serviced by LoanMart are unlike other loan options in that qualified borrowers could experience ease when the loan is paid back. Inquire today without obligation!