Steering Clear of Title Loans (3 of 3): What to do if You’re Already Trapped

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Any risky venture can always take a turn for the worse. If you go camping, you might get lost. If you go hang gliding, you might wind up stuck in a tree. If you enter a demolition derby, you might end up totaling your car – actually, you’ll definitely end up totaling your car. If you care about your car, there are two things you should never do: enter a demolition derby and take out a title loan.

If you’ve already taken out that title loan, though, you may feel like it’s too late. Maybe you’re behind on payments and you’re worried that you won’t ever be able to repay the loan. You might be on the verge of losing your car. But don’t worry, you still have options.

Option 1: Pay what you owe as soon as you can

These predatory loans typically have extremely high interest rates that build up the longer you take to pay them off. In some states, borrowers are allowed to rollover their loans, meaning they can extend the due date for an additional fee. But a lot of states have outlawed this practice as it leads to borrowers sinking deeper and deeper into debt. So if you have the funds, pay sooner rather than later.

Option 2: Cancel or Modify the Loan

“Woah, woah, woah. I can cancel my loan?” Well, maybe. Many secured loans contain grace periods. If you’re within this grace period, you may be able to cancel the loan—the problem is that grace period is usually only 3 days from the date the loan was taken out. So if it’s not too late, you’ll need to do this immediately.

Loan Modification is different. If you can show that your car is worth much less than what you owe you’re lender, you may be able to broker a compromise with your lender. The laws that mandate this are different state by state, so you’ll have to do your research before you try this method.1

Option 3: Get outside counsel

Check your loan’s paperwork and make sure you know all of the terms. Don’t rely on a predatory title lender to tell you what your rights are, read the paperwork for yourself. They may not be telling you the truth about every detail, and even keeping your options from you.

Also, consider contacting a credit counselor. Not-for-profit credit counselors can be found at www.nfcc.org and elsewhere; they can help you restructure your debt and potentially negotiate with your lender. They’ll also advise you going forward on how to repair or minimize the damage done by predatory lenders. Learn more about picking a credit counselor in the blog Bad Credit Helper: How To Shop for a Credit Counselor.

If you need a better loan that won’t risk your ride, consider a personal installment loan from OppLoans. We offer loans from $1,000-$5,000 with interest rates that are 70-125% lower than other personal lenders. You can apply at OppLoans.com and if you’re approved you can receive your money as soon as the next business day. We offer fast, safe loans that can help build your credit.

You won’t have to put your car on the line to take out one of our loans, so you can use your ride to enter a demolition derby instead! Or don’t. Actually definitely don’t, just use your car to drive to work and go on road trips and stuff. Stay away from demolition derbies all together. And stay away from title loans too.

References:

1. Lacoma, Tyler. “What to do when You’re Stuck in a Predatory Title Loan.” Ehow.com. https://www.ehow.com/info_8568423_do-stuck-predatory-title-loan.html Accessed 5.6.16

Blog Series: Steering Clear of Title Loans
Part 1: Three Must-Know Facts
Part 2: Don’t Risk Your Ride
Part 3: What to do if You’re Already Trapped