By Giles Milner, August 15, 2018
A title loan taken for emergency purposes can seem to be convenient at the time and the right thing to do but you should be warned, not all that glitters is gold and you should look before you leap. Title loans are easy to acquire and be approved of than any other loan. The title loans only require you to be in possession of collateral that may be repossessed if you default on your title loan repayment. The lenders are so quick to approve and offer the loan if you just sign your automobile as collateral.The penalties for defaulting on a title loan include losing your own car to the lender without refund of the payments you have made. The credit and the fines are also very high and stressing that is why it is advised to be sure before you commit. However, if you have already taken a title loan or you are planning to, here are some of the steps you should take to avoid defaulting on a title loan:
- Create a monthly payment plan. Title loans have a specified duration of payment that should be never violated. A mistake that many people make is to wait till the last minute in the hope that they will get the money to repay it all. This is highly inconvenient and is bound to fail. To avoid this, make sure you have a detailed and arranged monthly plan of your finances. Know what amount of money you spend and on what, also ensure that you have a specific amount sent to settle the debt. The amount should be calculated by dividing the amount over the period given. The amount should be slighter above the calculated amount to ensure that you are on the safe side.
- Never miss a payment. Once you have the calculated amount, do not be deceived to spend the money that you will compensate it later. Postponement of payment only makes it worse, you should be disciplined in your payment month after month. This will ease the burden of payment and will help you avoid the penalties. Missing monthly payments will not make you lose your collateral yet but it creates a lot of pressure and frustrations. To avoid all this stress and panic, make sure that you are on schedule with your payments.
- Outsource extra income. Once you have a title loan on you, getting another loan to pay off a loan is not a good idea and is not advisable. If you calculate your monthly income and find out that you won’t be able to make the monthly payment, do not be discouraged or wait out. The next advisable option is to find another source of income. No matter how small it may seem, it may boost you enough to make the cut and avoid losing your collateral to the lender. Work double shifts or an extra job to ensure you have enough and sufficient to pay off the title loan.