In a Nutshell

Title loan lenders don’t have title loan forgiveness programs. You must repay what you borrowed, but some lenders offer help. Be open about your financial struggles and why you’re experiencing them; you may be eligible for a loan modification or hardship program.

You aren’t alone if you can’t pay your car title loans. According to the CFPB, four in five borrowers must renew their auto title loans because they cannot afford to repay them. In addition, one in five borrowers lose their vehicle to repossession for failing to pay. While you may look frantically for a title loan forgiveness program, there isn’t a specific program to get you out of your loan. 

But don’t give up hope.

There are options to get out of a car title loan, but they require open communication with your lender and evaluating your options to see what’s most affordable. In short, you’ll still owe the money you borrowed, but you may be able to pay it back on different terms or even with a new title loan. 

See if you qualify for a title loan buyout with us today. We offer a free quote with no obligation, but it may improve your financial situation and provide you with some relief.

What Happens if You Don’t Pay a Title Loan?

It can be scary if you don’t pay a title loan. Lenders have many options, including sending your account to collections and/or repossessing your car. If they send your account to collections, it can decrease your credit score and chances of securing future credit.

If they repossess your vehicle, you are left without a car to drive. To get it back, you must meet their loan reinstatement requirements. This includes repaying the total loan balance or catching up on your past-due payments. You may also owe any outstanding fees, including legal fees.

Either way, it’s a challenging situation to navigate.

What Options are Available for Title Loan Forgiveness?

Technically, there isn’t a title loan forgiveness program; you must repay what you borrowed on this secured loan. However, options may be available to restructure your loan to make the payments more affordable.

  • Discuss hardship options with your current lender: Some lenders offer hardship programs, such as a payment plan, for borrowers who lost their jobs, became ill, or had a death in the immediate family. Be honest with your lender about your circumstances to see what options they offer to lessen your financial burden.
  • Apply for a loan modification with your lender: If you’re having financial issues, your lender may offer a loan modification option that allows you to ‘redo’ the loan terms. Each lender has different requirements and options for setting new loan terms. Discuss your options to determine affordability.
  • Refinance your title loan with another lender: You aren’t obligated to stay with your current title lender. If another lender offers more affordable terms or a lower interest rate than your existing title loan, you can use the new loan to pay off the loan. Before refinancing, be sure the new loan is affordable.

Good to know: How To Get Out Of A Car Title Loan

How to Apply to Refinance Your Title Loan

If your current lender doesn’t offer any financial hardship options, you may consider applying for a new title loan to refinance your existing one. 

Here’s how it works.

1. Complete a Loan Application

Complete a title loan application online. It takes only a few seconds, and you’ll have an answer instantly regarding how much money you can borrow. The title loan application asks questions about yourself, your residence, and your income. You’ll also provide information about your car, including its make, model, year, and mileage.

Since you’re refinancing, you must inform the lender about your current title loan. They’ll need this information to ensure you qualify to refinance it and can pay off the loan. This is a requirement since the new title lender will use your car as collateral.

2. Receive Pre-Approval

If you’re approved, you’ll receive quotes instantly. These quotes include the amount you can borrow and its interest rate and fees. Compare your options and choose the one that’s the most affordable. Remember, you are looking for a loan with more affordable payments than you currently have.

3. Provide Documentation

If you want to move forward, you’ll upload the following documentation:

  • Government-issued ID
  • Proof of residency
  • Proof of income
  • Pictures of your car’s interior, exterior, and odometer
  • The vehicle’s title

4. Receive the Funds

After processing your information, the title loan lender can fund your loan. Depending on how quickly you provide the information, this could be as soon as the same day or the next business day. 


Alternative Options to a Loan Forgiveness Program

If your title loan lender can’t help, or you don’t qualify for their assistance, consider these alternative options.

Start a Side Hustle

A side hustle may help supplement your income and allow you to make good on your debts. Gig economy apps like Uber or DoorDash are easy ways to start making money fast. You can also start a part-time job or work freelance jobs online. Use the money to catch up on your bills and to reduce the risk of losing your car in a repossession.

Borrow From Friends or Family

Your friends or family may be willing to support you in your time of need. Just like with your title loan lender, be open with your family and friends about your situation. Let them know what’s happening and why you need the money. As you would with a bank, sign a loan agreement that includes the repayment terms, such as when you’ll repay them and how much, if they want to charge you interest.

Is a Title Loan a Good Option for Emergency Funds?

Title loans are high-interest, short-term loans for financial emergencies. They should be a last resort because they require high monthly payments and can be difficult to afford. They are also secured loans, which means your car is at risk of repossession if you miss a payment. However, they provide a viable option when you are in a financial bind and don’t qualify for other loan options.

FAQ

Can You Get an Auto Loan Forgiven?

No, you cannot get an auto loan forgiven. However, some lenders may offer hardship programs or loan modifications to make your loan more affordable. Contact your lender immediately to discuss your options if you cannot afford your car payment.

What Happens When You Default on a Car Loan With Your Car as Collateral?

If you don’t make your payments on a loan that uses your car as collateral, the lender has the right to repossess the car. Every lender has different rules regarding how many payments you must miss before they take the car, but legally, in some states, they can do so after one missed payment.

What Happens if a Title Loan Goes to Collection?

If your title loan goes to collections, it can damage your credit. Most collection agencies report to the credit bureaus. If you don’t catch up on your payments, the lender also has the right to repossess the vehicle to collect the unpaid funds. 

Final Thoughts

Not being able to pay your title loan can be scary, but there are options to assist you. While there isn’t a title loan forgiveness program, lenders often have ways to help borrowers, including loan modification programs.

If your lender doesn’t offer assistance or you don’t qualify, consider applying for a loan buyout with us to help you get back on your feet or call us at 1-800-700-8900 with any questions.