A refinance, also known as a rollover, is a term that's generally used to describe an extension to a payment schedule. For example, let's say you take out car title loans in Austin but find that you don't have the means of paying them off on time. Instead of having your collateral forfeited, you could opt to communicate with the lending company and request more time to pay it off. The company will create an extension period — usually 30 days — provided you meet their requirements to do so.
The alternatives to refinancing title loans is either:
When the first option is impossible and the second isn't acceptable, you'll need to request a rollover to get a leg-up on your payment window. This is a perfectly acceptable and common situation for many clients, since financial complications are the very reason they needed a title loan in the first place. We can't expect every client to solve this within a month, and many of them do need more time to get a handle on paying it off.
The conditions for refinancing title loans are far from stringent, requiring only two inputs from you:
That's it. Unpaid loan principal — in other words, the amount borrowed — will be rolled over to the extended payment window under a modified, often slightly higher interest rate. Since Texas state law stipulates that title-based lending companies can't assess interest rates in excess of 10%, the rates remain manageable even after committing to a rollover plan.
The only time that a refinance may be denied is if you fail to pay off the interest for the term that you're attempting to extend. Despite this, our loan specialists have the final say, and communication is essential. If you've failed to make it on the interest payments for some reason but provide evidence that all debts will be relieved inside the following period, we can work with you to make an exception.
The important detail to pay attention to is that you've borrowed money from someone else's pocket — that pocket being ours. At some point after lending the money, we need to earn it back somehow, which is the point of securing the loan with your auto title. As such, the pressure to pay off the loan will increase over time, and this is expressed in the form of rising interest rates with repeat rollovers.
There are a few points to take note of:
The takeaway from all of this is simple: You'll pay slightly more from one payment term into the next, but we're more than happy to help you do so — it beats the other options, and that's as much for your benefit as ours.
Some lenders can actually commit to a buyout on a title loan that was created by another company. Typically, clients will find themselves requiring a buyout when they've chosen to do business with an unethical lending company, in which case the new lender will help the client escape from the predatory lender by taking over the loan plan and reforming it down to a more palatable rate. Like with traditional rollovers, this will come at its own price, but we won't lock you into a cycle of debt like the other company did.
Bear in mind that buyout plans are contingent upon many of the same factors that decide your eligibility when acquiring or refinancing title loans. This means that we'll consider the following:
As with most title-based lenders, we don't need to check on your credit history when deciding upon your ability to pay off a rollover or buyout plan. When rolling over a loan from another company, the title will need to be transferred to us, as will all debts to the previous lender. From that point on, we assume control over what remains of the balance and how you'll pay it off.
Basically, this is what you need to know about refinancing title loans: