Did you jump the gun and take an auto title loan you can’t afford? Maybe you’ve missed payments or come close and wonder if a title loan refinance is possible.
The good news is that some car title loan lenders, like Swift Title Loans, allow a refinance if you have enough equity in the car. Equity is the difference between the car’s value and the existing car title loan balance.
If there’s enough there for a new title lender to lend you money to pay off the title loan and still have adequate collateral should you miss your payments, you may be able to refinance.
What is a Title Loan Refinance?
A title loan refinance is a new title loan that pays off an existing title loan. You can often refinance with your current car title loan lender or find a new one that offers better terms. The key to title loan refinancing is to find one with more favorable loan terms, such as a lower monthly payment.
Are There Any Restrictions to Refinance a Title Loan?
Car title loan refinancing is simple, just like borrowing the original title loan; however, there are a few restrictions to consider:
- You must refinance the full title loan
- There must be adequate equity in your car
Depending on your car’s value and the outstanding loan amount, you may be eligible to borrow more cash than you owe on your loan. However, ensure this makes sense if you’re refinancing a car title loan because you cannot afford the current loan payments.
Steps to Apply to Refinance a Title Loan
Applying to refinance a title loan is similar to when you first considered car title loans to handle your financial emergency.
1. Complete an Online Application
You can apply online for an auto title loan refinance. At Swift Title Loans, it takes only a few minutes to complete the application with your personal details, income, and information about your car.
2. Share Your Current Loan Details
You must provide information about your current title loan to complete the application process. You can get this information from your latest statement.
3. Receive Offers to Compare to Your Current Car Title Loan
Within minutes, you’ll receive pre-approval offers for various loan terms. You can compare these options to your current title loan to see if it makes sense to refinance.
4. Provide Documentation if the New Loan Makes Sense
If refinancing a car title loan makes sense, you must provide the new lender with documentation to prove you qualify for the loan, including:
- Paystubs or other proof of income
- A valid, government-issued ID
- A copy of the vehicle’s title
- A copy of the current title loan statement
5. Provide Pictures of Your Vehicle
Like when you borrowed your existing title loan, you must provide pictures of the vehicle. Most borrowers need to provide pictures of the car’s interior, exterior, and odometer, but the lender will tell you what you need.
6. Receive Final Approval and Funds
After the lender approves your loan, they will pay off your existing loan, and you will receive any remaining funds (if applicable). This usually happens either the same day or the next business day.
7. Make Your New Car Title Loan Payments
After the loan funds, you’ll have a new loan to make payments to, either to the same or a different lender.
Why Consider Refinancing a Car Title Loan
Refinancing a car title loan isn’t for everyone. Here are some reasons to consider it:
- Reduced interest rate: If you borrowed a title loan with a higher interest rate than lenders offer now, it may benefit you to refinance to save money on interest charges.
- Lower monthly payments: Since you owe less on the title loan now, you may refinance that amount and get lower monthly payments.
- Extended loan term: If you don’t qualify for a lower interest rate but can’t afford your payments, you may qualify for a longer loan term, which makes lower monthly payments.
- Changing lenders (better customer service): If your current lender doesn’t provide great customer service, you may want to refinance for better servicing.
- Prevent repossession: If you’re behind on your current title loan, you may be able to refinance into a loan with better terms and avoid the risk of repossession.
- Get access to more cash: If you owe less than a title lender will lend, you may be able to get the difference in cash to use for other financial emergencies.
What Happens to The Title in a Car Title Loan Refinance?
When you refinance a title loan, the title gets transferred from the old lender to the new one. Depending on state laws, you may need to visit your local DMV office and pay a transfer fee. Ask your title lender what’s required so you can ensure the title transfer is successful.
FAQ
Can You Get More Money When You Refinance a Title Loan?
You may be eligible for more money when refinancing a title loan. It depends on the balance of your existing loan and your car’s value. A title loan lender can tell you how much you can borrow and the payments to help you decide.
Does your Credit History Matter When Applying to Refinance a Title Loan?
No, like when you applied for the original title loan, lenders don’t put a lot of emphasis on your credit history. They will do a credit check, but unless you have a current (non-discharged) bankruptcy, it shouldn’t affect your ability to refinance a title loan.
What are the Disadvantages of a Title Loan?
Title loans have several risks, including the high interest rates they charge and the risk of losing your car if you don’t pay. Exhausting all options before borrowing a title loan for your financial situation is a good idea.
What is a Title Loan Buyout?
A title loan buyout is different than a title loan refinance. A buyout is simply transferring a title loan from one lender to another, not because the borrower asked for it. Instead, it’s a business decision between lenders. Your loan terms remain the same, unlike in a refinance, where you may get better rates or terms.
Final Thoughts
A title loan refinance may save money on your monthly payments or give you better loan terms. At Swift Title Loans, you can apply online for free and with no obligation. It doesn’t hurt to see what you qualify for and if you can save money on your monthly title loan payments. Apply now to see your loan terms.
