How to Sell Vehicle with Title Loan
Several car owners sell their cars privately, either to dealers or individuals. Similarly, many car owners have their cars financed through banking institutions or credit unions.Title loans have become more prevalent as it's become more difficult for consumers to borrow money in other ways. Credit cards are harder for some people to get, home equity lines of credit have dried up, and many states have tightened regulations around payday loan lenders. Auto title loans have become a last-ditch financial lifeline for many.Now the question is: If you don't have the title, how will you sell a car?
What is title loan?
An auto title loan is lent to an individual on the basis of his/her car title and the amount of this title loan is determined by the worth of the car. If you are unable to repay the full loan or it goes in default, then the loan company has the right to sell off the car and get back the amount of the loan. Approximately half of US states ban auto title loans outright. Be sure to check your local state laws.If you take such loan, you receive the money within a short period of time. For securing it, it is possible to request for quotes from different lenders. But you have to be sure that the rate of interest is not too high and it is convenient for you to repay the loan monthly.In some cases, legal loopholes allow title loan lenders to thrive. California, for example, has caps on the interest rates charged for small loans, but there is no ceiling for loans above $2,500. As a result, many lenders require that borrowers take out loans of at least $2,500, even if they need less, according to the Los Angeles Times.
These are few options for car owners looking to sell their vehicle with a title loan.
Selling a car with title loan
- Contact the Lender - The lender owns the right and also in the best position to guide you about the process. Don't worry. He must have heard this question often before and he will outline the procedure that you and the buyer should follow. Consult your bank and they will guide you through the process.
- Payoff the Loan - Another way to sell a car with title loan is to get the payoff amount on the current loan before you can sell it. You need to contact your lender/bank and request for the payoff amount on the car. Since you are not able to pay off the loan, relate with the lender/bank if it is possible to aid payment to lien holder with normal transaction, after you have reached an agreement with the lender, pay off the lender and get back the car title.
- Bank Transfer - Arrange with the buyer to conduct the sale of your car at the financial institution. You will settle the current loan with the sale proceeds and transfer the car title to the buyer. But, you need to have contact the bank beforehand to facilitate this transaction. This type of deal requires a considerable trust on the part of the buyer.
- Signature Loan - This is another option to sell your car in case you have no money to complete the loan before sale.Contact your bank and request for a cash advance on your credit card or obtain a signature loan to payback the lender. This will help your sale go more smoothly because you will have more buyers considering a car that is paid off and has a clear title.
Those considering selling a car while the bank/lender still holds the title will need to do a little more groundwork, but it's not unattainable.