If you turned to an auto title loan in a financial emergency, it’s easy to accidentally sign up for a plan that doesn’t actually work with your budget and financial situation. Many car owners realize that they’ve overestimated their ability to pay the loan back according to the original terms—but they don’t want to risk losing their car, either. Fortunately, you may be able to work with your title loan lender to get better terms. Here’s how to get a local refinanced auto title loan in Phoenix, AZ.
What is refinancing?
Refinancing your auto title loan simply means that another lender will buy your debt and give you better terms for repayment. Not everyone will qualify for refinancing, but in many cases, it can make the difference between your car being repossessed and defaulting on your title loan.
Benefits of refinancing your auto title loan
Not sure if refinancing is right for you? Here are some of the benefits of this approach:
- Avoid repossession: If you fail to make timely loan payments, your lender can repossess the car. That’s because your car is used as collateral for the loan, which is tied to its resale value. If you can’t make the payments, your lender is entitled to seize the car and resell it to recoup the outstanding loan amount.
- Avoid default: If you’re behind on your payments and your loan is about to go into default, refinancing can help you avoid repossession and the hit to your credit score when you default. Your new lender will pay the old loan, which makes your previous lender “whole.” Then you can continue to pay it off, potentially with lower monthly payments and interest rates.
- Get a better payment plan: Depending on your credit score, you might be able to lower your monthly payments by lowering your annual percentage rate (APR). However, lower credit scores may actually see higher payments, so choose your options carefully.
- Lower your interest rates: Most people refinance their auto title loans to get a better interest rate. If your credit score has gone up since you applied for your loan, you might qualify for a lower rate, which can help you pay off your loan a lot faster.
How to apply
Your refinance title loan application process will be very similar to the initial loan application. The loan officers will check your credit score and your car title, estimate your car’s value and look at your ability to repay your title loan. Your loan officer will look at all of these factors to decide whether you’re eligible for a refinanced loan, including lower monthly payments and interest rates. If you qualify, the loan will be granted. If you don’t, they may be able to recommend other ways to achieve your financial goals.
Refinanced auto title loans can go a long way toward freeing up some monthly cash, paying down your loan and keeping your credit score up. For more information about local refinancing for auto title loans in Phoenix, AZ, call Cash-N-Go Auto Title Loans of Phoenix.
Categorised in: Refinancing