There are many loan options out there that can affect your credit history. This means that missed payments, late payments, or repossessions will cause your finances to crumble. In the financial world, the responsibility of proper loan management is solely on the applicant. A loan has the potential to help rebuild or hurt your finances. While title loans can do great things for someone in a moment of need, proper management is important. How else would people buy cars, houses and pay for school?
Loans to Rebuild Your Finances
Below are examples of loans that you could apply for if you are looking to rebuild your finances. The more you know about these types of loans, the fewer the chance that you will end up having to rebuild your finances.
- Car Title Loans — Car title loans are secured with the borrower’s qualifying title of the vehicle. Eligibility and loan amount is based on your ability to repay the loan and the value of your car, not your credit score or credit history. Keep in mind that most lenders will conduct a credit check to find out whether you are in inactive bankruptcy. The loan amount can range from a few hundred up to a few thousand dollars.1, 5
- Payday Loans — Payday loans are generally short-term loans meant for more minor expenses (they usually are only up to a few hundred dollars). Although these loans can be fast and easy to qualify for, their short-term repayment periods and fees attached can make them tricky to pay back.
- Secured Personal Loans— In some cases, securing a loan with an asset such as jewelry/antiques, etc., can also be an option for bad credit.
- Secured Credit Cards— There are credit cards that are essentially credit builder loans; with down payment and on-time monthly payments, you may get a small credit limit.
In the event that this has already happened continue reading to find a couple of tips on how to improve your situation. Let’s start with the loan basics!
What is Loan Default and Does it Prevent Me From Rebuilding my Finances?
In most cases, loan default or non-payment means that successive payments have been missed over the course of weeks or months. Fortunately, most lenders usually allow a short window of time before penalizing the borrower after missing one payment. As a result, this is called a grace period. The time between missing a loan payment and having the loan default is known as delinquency. It gives the debtor time to avoid default by contacting their loan servicer or making up missed payments.
A title loan grants you the ability to borrow cash using your vehicle as collateral. Since your vehicle already secures the loan, there’s no need for all the paperwork associated with traditional loans. If you do not pay back the loan, the lender can simply take possession of your vehicle and sell it.
Auto Title Loans Aren’t Just for Vehicles
If you are looking to get a title loan to rebuild your finances, know that you can use more than a car to secure cash!5 Some examples of different vehicles that can be considered for loans are:
- All-terrain vehicles (ATVs)
- Recreational vehicles (e.g. Trailers, motor homes, etc.)
- Cold weather transportation (e.g. Snowmobiles)
If you get a loan on any of the vehicles mentioned above, they can come up on your credit report. Beware that rebuilding your finances means a deep look into all of your debt, payments, and consistency.
What Can I Do To Help Reduce the Negative Impact of a Missed payment and Rebuild My Financial Sitatuion?
If you are looking to rebuild your finances, you need to make sure you do not default on your loan. Once a default is recorded on your credit record, it cannot be removed for six years. There is only one exception, and that would be if it’s an error. However, there are several things that can reduce the negative impact:
- Repayment: Firstly, pay off what you owe as soon as you can.
- Explanation: Secondly, ask the reporting agency to add a note to your credit report to help lenders understand why you got into debt. Some examples include medical illness or family emergencies.
- Time: Lastly, as your default report ages, it may become less important to lenders. So, after a few years, you may find it easier to get approved for credit again. Keep a positive mindset.
Become an Authorized User to Rebuild Your Finances
If you are looking for another way to rebuild your finances, one of your options could be becoming an authorized user. What exactly do we mean by this? An authorized user gives you the power to use someone else’s credit card in your name. As a result of this, you can make purchases and use the card as if it were your own, but you’re not the primary account holder. But, before you’re added as an authorized user, you may want the primary account holder to ask their credit card issuer whether it reports authorized user accounts to the three major credit bureaus. If the card issuer reports to the bureaus, then the account will typically show up on your credit reports within 30 to 45 days.
Refinancing your Title Loan
Ultimately, one of your smartest options to consider when facing default is refinancing the loan. Refinancing a loan could mean lowering the interest rate, as well as saving money in the long run. Many borrowers will refinance their loan to combat high-interest rates, or lower their monthly payment to something more affordable. That’s where Max Cash® Title Loans can come in and make your life easier.5 Through Max Cash Title Loans, you have the option to refinance your existing car title loan through us!
Refinance Your Title Loan and Rebuild Your Finances
Start the refinancing process today by applying online through Max Cash Title Loans. If you have any questions, our loan agents are available 7 days a week to take your call at 855-561-5626!