Debt settlement may look like the best solution to get rid of your medical, payday loan or credit card bills, but making use of this preference for car title loans may deteriorate your financial condition. But, depending on your bank balance, willingness to pay and negotiating skills, you may have an opportunity to negotiate with your auto title loan lender to get a reduction of as little as 25-75% of what you owe.
Debt settlement works in different ways. Trying to settle the debt yourself or making use of a debt settlement firm. If you go through a debt settlement company, you’ll give them all information concerning what you owe. You’ll make payment to the settlement company and in return, they will put that money into a savings account. Once the balance in the account has reached a certain amount, the company will call your creditors to make an offer on settling your debt. It may be a percentage or flat fee of what you owe. Once this is known, the debt settlement firm will pay your creditor.
If you want to attempt debt settlement on your own, you can call your creditors and negotiate a settlement price. But bear it in mind that, you must be ready to offer them a huge amount if they agree on a settlement rate. In some cases, the collector you’re negotiating with is permitted to reduce the amount you owe.
Repaying a debt with a car title loan lender will be different. Because, the lender won’t negotiate with you until you’ve defaulted on your loan. They will make several efforts to get you to pay what you owe. The amounts of loan on car title loans range from $1,000-5,000 which means the lender will want to get their money back.
One of the main differences between settling on a medical bill and a car title loan is that the title of your vehicle will be withheld by the lender. This puts them in the best position to negotiate. They understand that you don’t want to lose your vehicle and they will have more negotiating power. Most car title loans lenders do not report to credit bureaus when you settle your payment, it won’t have any effect on your credit score.
Anytime you want to negotiate a debt settlement with the car title loan lender, you can start by evaluating your loan information which is contained in the fine print document and find out the amount you owe. The next thing is to find out the worth of your car by making use of an online calculator. If your car is worthless to the amount you owe, the lender may be more open to negotiating a settlement since it’s more profitable for them than trying to sell at an auction.
Decide on the amount you can afford, some lenders expect debtors to offer at least 20%. Start low so you’ll the best chance of settling you loan. Once determined, send a letter to the lender with how much you owe, your account information, how much you’re willing to pay and the current value of your vehicle. You’ll also want to explain why you cannot repay the full amount of the loan.
If at first, the lender does not accept your offer, be determined. Keep negotiating until you and the lender reach an agreement concerning the amount you can afford. Get the settlement in writing and make sure you pay the negotiated amount.