5 Steps To Help You Pay Off Your Car Title Loan Early
Everyone wishes he or she could pay off all their debts early. Doing so has some serious benefits especially in this tough economy. Among the major loans one should aim to pay off early is the title car loan. A major benefit of clearing your title car loan in good time is that you will be able to save huge sums of money on the interest rates.
For those individuals who are in a tight budget, they can improve their monthly cash flow by learning to pay off their title car loan early. A long-term advantage of paying your loan early is that it will improve your credit score significantly.
Here are some of the steps you can take to achieve that:
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Weigh your options
As strange as it sounds, paying off atitle loan early is not for everyone. Some will simply not have the resources to do so. Others may end up paying higher interest rates because their auto loan contract has certain penalties that work against early payments. Once you determine that your resources or your lender does not limit you, you can opt to pay off the loan early. The first thing you need to do is gather all the information regarding your loan. Normally, you will find this information on the loan statement.
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Create an amortization table
An important tip that will help you be able to pay your title loan early is to create a simple amortization table. You can do this by simply using the spreadsheet tool on your PC. Start by entering your latest information on the loan. You will then have a good idea of the additional amount that you need to pay off each week in order to complete your payment in less than 30 days.
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Pay the extra amount separately
It is crucial that you make your extra weekly payments separate from your usually weekly title loan payments. Use a different check for the extra payments and do not forget to indicate “Principal Only” on that check. Doing so will alert the lender not to include the payments in your loan statement the following week. Following this guideline will enable you to pay your loan early and lower your interest rates. Regardless of how little or how big the extra amount is, always use a different check to make the payment to the lender.
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Choose a suitable payment method
In general; when you want to pay off your title car loan earlier than the 30-dayfixed period, you have three options. The first one is to write a separate check to the lender. The second option involves renegotiating the terms of your agreement to increase the amount of weekly loan payments. Thirdly, you can make the loan payment early using a lump sum payment. The best option will mainly depend on your finances. It is not advisable to take another loan so that you can clear your title car loan.
If you really cannot be able to make the extra payments per week, raise your weekly loan payment or pay a lump sum of cash, but still want to pay off your loan early, you should consider paying a week in advance. Approach your lender and make them aware of your decision. If they agree with it then you will be able to make your loan payment early. Let the lender know that you will be making the payments one week in advance and let them be aware it is a regular thing. The best time to start making the payments is often immediately you receive the loan.
Author Bio
Lolly Watson is a blogger who focuses on writing posts that deal with finance since he is also a reputable financial expert. He has recently written very informational material on Los Angeles title loans.
Category: Car Loans
