How to Get Out of a Title Loan and Avoid a Repossession

Title loans are short-term arrangements -- usually about a month -- with very high interest rates, using your car as collateral. Title loans are very dangerous because if you fail to repay the loan as agreed, the lending company can repossess your car and sell it to pay your debt. If you lose your car, your financial situation might get even worse because you cannot get to work anymore. Therefore, repaying your title loan should be a high priority. However, it's often difficult to come up with the full amount needed to repay the debt. Borrow this money from another source with lower interest rates to get out of the title loan and avoid losing your vehicle.


Step 1

Calculate how much you need to pay off your car title loan in full by its due date. This is the balance of the loan plus any accrued interest or fees. By coming up with this much money, you can pay off the title loan in full rather than rolling it over to another month and paying the additional interest.

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Step 2

Apply for a personal loan at a bank or credit union for that amount. A personal loan has a much lower interest rate than a car title loan and allows you to stretch repayment over a longer time period.


Step 3

Ask a friend or family member with good credit to co-sign the personal loan if you cannot qualify on your own or if the interest rate is too high.

Step 4

Take a cash advance on your credit card if you cannot get a personal loan and already have a card with enough available credit.

Step 5

Use the personal loan or credit card cash advance to repay the car title loan and keep your vehicle.


Step 6

Make regular payments on your personal loan or credit card to repay the money you borrowed. The larger your payments, the less interest you'll pay.


Contact the car title loan company and ask for a payment plan if you cannot get a personal loan to repay it all at once. Not all title loan companies will offer this feature, but some states have legislation requiring them to offer payment plans to borrowers who cannot make the lump sum payment.