How Do You Repay a Car Title Loan?
September 29, 2011
A car title loan involves borrowing money and using your car as security. You get to retain possession of your vehicle and continue to drive the car when you take a car title loan, as long as you repay the loan according to the terms of your agreement with the lender. The lender will take your vehicle and sell it to recover the money that they lent you only if you fall behind and do not make the payments as promised. This means that it is essential that you understand your repayment agreement and are confident that you are able to abide by the terms of your agreement and make payments as promised.
Repaying Your Car Title Loan
When you repay a car title loan, you must repay both the principle balance that you borrow as well as any interest and applicable fees associated with the loan. When you take out your loan, your lender will explain to you exactly how much you will be responsible for paying in interest and will let you know how much you have to pay back to repay the loan in full. This will give you a good idea of exactly what kind of obligation you are taking on.
Your lender will also work with you in order to determine the repayment structure and schedule. In many cases, your lender will have set requirements in place for when the loan must be repaid. For instance, you may be expected to make weekly payments towards your loan. In other cases, however, your lender may be willing to work with you in order to set up the payment structure that makes the most sense given your finances. For instance, if you are paid monthly or bi-weekly, your lender may be willing to work out an arrangement with you that allows you to repay the loan at the same time as you receive your paycheck. This can make budgeting much easier and help to ensure you repay the loan in a timely fashion.
Once you have a payment plan in place, you may have a choice of either setting up automatic payments from your bank account or of sending in your payments by the agreed-upon date using a check or a money order. Automatic payments can make the process of repaying your car title loan simple and easy since the money will be debited from your bank account on a pre-selected date. However, it is often up to you which repayment method you choose and you can select the option that works best with the way you manage your money.