A car title loan is a great way to get money in a short amount of time, because you don't need to bend over backwards or fulfill a great deal of requirements in order to be approved. Plus, you get to keep your car the entire time, so you can continue driving while you make payments. However, what if you're in the market for some fast cash, but want to explore your options beyond a car title loan? For your convenience, we have compiled a list of title loan alternatives, including some relatively easy ways to boost your income.
Loans or gifts from loved ones
If you're in a financial bind, have you asked your friends or family members for help? A loved one might be willing to provide assistance in the event of an emergency. If a gift is not possible, you can draft up a formal loan agreement that outlines details such as the interest rate and repayment plan. One of the biggest differences between a traditional loan and a loan from someone you know should be the interest rate. Instead of possibly being charged triple digits, the interest rate can be in the single digits or even zero (if your friend or family member is particularly generous).
Short-term bank loan
If you're looking for an alternative to a car title loan, but you own your vehicle outright and are currently employed, you should explore your options at your local bank or credit union. Title loans, on average, cost far more than even the most expensive bank loan. If you're worried about being denied due to a low or nonexistent credit score, some banks offer collateral loans, so there is a possibility to pledge your car and receive more reasonable, bank-level interest rates.
Bank approval rates can be quite variable, so you have a better chance of getting the money you need via a peer-to-peer loan. Since peer-to-peer loans are funded by investors, there are fewer requirements to fulfill when compared to the requirements set forth by banks. Even if you have poor credit, interest rates typically do not exceed 30% annually. The minimum loan amount for a car title loan may be lower than the minimum amount for a peer-to-peer loan, so you may have to borrow more than you need. However, you can pay off your peer-to-peer loan at your earliest convenience, because there are no prepayment penalties.
Credit card cash advance
Credit card cash advances are not always the most economical way to get the money you need, but interest rates do not exceed the rates typically associated with car title loans. If you are certain you will be able to repay your loan within the designated timeframe and you have a credit card with available credit, you may be able to get your funds and pay less. A cash advance is only a smart move if you know you can pay in full on time. Otherwise, interest charges will pile up and what is designed to be a short-term solution could end up costing you a lot of time and money. Even if you don't repay your cash advance on time, the extra costs of rolling over a car title loan may still be greater.
Negotiate with creditors
If you have a bill hanging over your head that you simply cannot afford to pay, try negotiating with the creditor. If you discuss the situation, many creditors will offer concessions such as a discount, lower interest rate, or waived late fees. Others may give you the opportunity to alter your payment schedule. How much the creditor is willing to budge will depend on your payment history and current situation.
Take on extra work
If possible, it may be helpful to look for ways to bolster your income. Many people take on a second (or third) job in order to earn some extra cash. Whether you find a one-time gig or a recurring role, some extra cash flow can help you make ends meet and possibly even avoid taking out a loan. Start by asking your personal contacts if they could use some extra manpower and go from there.
Credit and debit counseling
All 50 states offer either low-cost or free credit and debit counseling. If you are caught in a seemingly never-ending cycle of debt and often find yourself paying an arm and a leg for some fast cash, talking to a certified financial counselor is a wise choice. The counselor can provide guidance regarding ways to make ends meet, including how to cut costs, how to get out of debt, and how to save for emergencies. You can also devise a debt management program, as well as discuss how some short-term loans can do more harm than good.
All in all, if you are looking for an alternative to a car title loan, but still need money as quickly as possible, be sure to consider the options outlined above. Everyone's financial situation is unique, so be sure to do your research and consider the costs before signing any type of loan agreement. Short-term loans are a great way to get money in a hurry and avoid all the hassles of a traditional loan, but you need to weigh the pros and cons before making your final borrowing decision. If you learn how to effectively manage your money and use measures of assistance wisely, you will reap the benefits in the long run.