Title loan otherwise known as car title loan is a type of loan, usually short-term, which is secured with the borrower’s vehicle used as collateral. The lender can place a lien on the collateral (car’s title) as well as acquire the hard copy of the title from the borrower. This is for a specific time and in exchange for the loan sum. The title is returned on repayment of the loan while in situations of default, the lender may legally take possession of the vehicle and dispose of it to cover for the outstanding debt if he so wishes.
A title loan buyout, on the other hand, is an agreement where one lender undertakes to buy out your existing loan from your prior lender. That is a loan company paying off your initial lender then replacing such loan with new terms. This is so because no two lenders have the same prices and policies.
Below are some considerations for you before getting a title loan buyout:
· Consider the terms of your present loan contract to see whether it requires refinancing.
· Check whether the policies and rates of your present lender are unnecessarily higher than other lenders.
· Enquire about the policies and rates offered by other lenders, then make considerate analysis to check whether their terms and conditions, as well as rates, will be convenient for you.
· You must have tried to make repayments to your previous lender as you may be required to provide documents showing your income to reassure the new lender you can repay the loan.
Getting a title loan buyout:
First, you will need to find a lender who is willing to pay off your entire existing title loan with new terms and conditions which are convenient for you. Then you provide all necessary or basic information required of you regarding financial details and the previous loan.
After providing all the basic information required, you may then sign a new contract with the subsequent lender, and he pays your existing debt to the original title loan lender. The lien is then transferred from your original lender to your new lender. That is, the new lender now holds the lien to your vehicle.
And that is all. You now have a new lender to whom subsequent repayment is made, after which you can regain title to your vehicle.