Three Tips for Avoiding a Cycle of Debt With Car Title Loans
The reason why you took out a car title loan may range from the need for urgent car repairs to being short on cash to pay for a medical bill. With a car title loan, you borrow against the equity in your car by putting up your vehicle as collateral. For many, this type of cash advance loan can be a huge help, but others get trapped in a cycle of debt. Here are three tips for avoiding problems.
Pay the Loan Back in Time
Generally, a car title loan must be repaid in full within two weeks, usually this means by your next paycheck or two. Make sure that money is available and not used on anything else. If you receive your paycheck and have a sudden urge to go out to dinner, skip the temptation. You need to pay that loan back. Renewing the loan will rapidly build up fees and interest to levels where you may not be able to afford to pay back the loan.
Cash In Everything You Can to Come Up With the Repayment
If you find yourself short on money and fear you cannot repay your car title loan on time, start coming up with extra cash. There are a number of ways you can quickly collect money. Hold a garage sale and sell off unwanted or infrequently used items. That chainsaw you use maybe once a year can put cash in your pocket. Talk to your employer about cashing in vacation time to get the extra money, some companies will do that. Cancel cable television or land-line telephone service to cut expenses until your car title loan is repaid.
Talk to Your Bank
If you have taken on too much debit with a car title loan, talk to your bank or credit union. You may be able to take out a personal loan to pay it off. The interest will be much lower, and you have more time to pay back the loan.