Title loans can help if you need cash, and they’re typically approved with minimal documentation beyond the car’s title. But what happens if you cannot make the required payments or have already fallen behind on your loan? Sure, you may consider refinancing your loan, but what if you don’t want to start the application process from scratch? In this scenario, a title loan buyout is a realistic option to find a new lender willing to reduce your rates or refinance your loan with more favorable payment terms.

Title loan buyouts are less common than they used to be, as most lenders are unwilling to take over or “assume” a loan that’s at risk of default. However, for the right person, a buyout can save you money, get you back on track with payments, and avoid the more drastic scenario of your lender repossessing the car and selling it at auction.

How Does A Title Loan Buyout Work

A title loan buyout means you’re working with a new lender that agrees to refinance the existing title loan. The desired outcome of any buyout is to get a new loan with a lower interest rate and extend the payment term to a more manageable level. Some customers will look to lower the monthly payments on their loan

if they can no longer afford the amount due. However, reducing the monthly payment can make it harder to repay the loan, since less money each month goes toward principal.

A title loan buyout gives you a fresh start with a loan on a pink slip, and in most cases, the new financing company pays off your original lender. With these buyouts, you can save a considerable amount of money, but they’re also tough to get approved for, as some companies hesitate to offer loans when you’re already behind on payments.

How Is A Title Loan Buyout Different From Refinancing

Many of our customers think a title loan buyout is the same as a title loan refinance, and we can’t blame them, since both change the terms of a loan. However, a buyout and a refinance differ in who initiates the loan offer and how the loan terms change.

With a title loan buyout, aside from the initial application, applicants have minimal involvement during underwriting. Lenders handle most negotiation and underwriting. The new lender pays off your original lender, and you start making payments to the new company shown on your car’s title. Sometimes the interest rates, payoff terms, and other lending details stay the same. In other cases, your new lender may work with you and reduce the interest rates or make the payoff terms more flexible.

With a title loan refinance, you start the process to pay down the balance on your existing loan and get new payoff terms. You can refinance with your existing title loan company or a new lender, and there’s no risk beyond the time it takes to see whether you can lower your monthly payment or interest rate.

Get Pre-Approved With Premier Title Loans For A Loan Buyout

You’ll be pleased to know that Premier Title Loans offers pre-approval for a loan buyout with eligible car title loans. That means you can get yourself a new payoff term and possibly reduce the interest rate on your current loan. The main requirement is proof and documentation of your current loan. You can provide your existing loan documents, including your lender’s contact information.

A prospective lender will then contact your current lienholder and try to buy out that loan, and you’ll get a fresh start with a new lending offer. Anyone who applies with us using a typical title loan or even a salvage title loan will be considered. Still, you have a better chance of approval if your vehicle hasn’t been repossessed and you are current on your monthly payments.

Benefits Of Buying Out A Title Loan

Improved Interest Rates – It doesn’t make sense to keep paying on a title loan if you can get the same loan at a lower rate. Many loan buyouts can lower your interest rate, which can shorten the repayment term.

Less Financial Stress – Let’s face it: defaulting on a title loan can increase financial stress, and you may lose your vehicle to repossession. Having a loan bought out alleviates the financial burden and helps you avoid additional late fees and interest charges.

Protect Your Credit Score – If your lender reports payments to the credit bureaus, falling behind can hurt your FICO score. When a lender buys out your loan, you get back on track with payments and can improve your credit score.

Quicker Payoff Terms – No one wants to make payments on a loan when a faster payoff is available. Premier Title Loans can help you find a lender to buy out your loan. Instead of paying off your bad-credit title loan in 12 months, a buyout can reduce the term to 6 months or less.

What To Look For With A Buyout On Your Car Title Loan

Any time you consider refinancing your loan, you need to think about whether buying out an existing loan is worth your time. Will you save a substantial amount of money with a buyout, and can you pay off your loan earlier than you initially expected? If either answer is yes, it makes sense to shop around and get a few quotes to see if you can save money by refinancing a title loan.

You also want to look out for companies that claim they can buy out your car title loan if you’ve already defaulted or had the vehicle repossessed. In this scenario, it’s challenging for any lender to approve a buyout, as they would essentially be taking on a loan obligation already in default. It’s unlikely that a company offering a car title loan would pay off the existing loan, only to be left with a situation where you can no longer make the payments on your new lending terms.

New Payment Terms And Interest Rates With A Title Loans Buyout

Applying for pre-approval with a title loan buyout is a clever way to lower the interest rate or reduce the payoff term. Contact us at 800-250-6279 if you’re unsatisfied with your current APR or want to see if you can get a quicker repayment term. We’ll get you a lending estimate within minutes to help you decide whether a buyout is right for you.

Jessica Chase

Jessica has been working in the title loan lending industry since 2012. Before that, she managed a team of customer service representatives for one of the largest payday loan companies in the US. Since coming to Premier Title Loans, she’s overseen our sales and marketing department and looks forward to educating consumers on their different financing options. Jessica is always open to feedback and questions related to short term loans!