How To Pay Off Title Loans Fast

A woman sitting inside an electric car while using her smart phone.

Most of us have been in a tight financial spot at one time or another. Some of us might have even taken out a loan or two to get out of a bind. One of the more common loans that people take out is a title loan, also known as a car title loan.

Read on as we give you nine useful tips on how to pay off title loans fast to ensure that your vehicle does not get repossessed and you save up on interest. 

What is a title loan?

A title loan, also known as car collateral, auto equity, or pink slip, is a type of secured loan where you put the title of your vehicle up as collateral. Once the loan is repaid, the lender will return the vehicle title to the borrower. If the borrower defaults on the loan, the lender will repossess the vehicle and sell it to cover the borrower’s outstanding dues.

The most common type of title loan is a car title loan. If you own a car outright, you can sign the car title to the lender when you take out the loan. Lenders typically let you borrow up to 25% of the car’s current value in exchange for the car’s title. Loan terms usually last 15 to 30 days or longer. You can repay the loan after a month in lumpsum or sign an agreement with the lender on a multi-year installment payment plan. 

How do title loans impact your credit?

It’s important to understand the impact title loans can have on your credit history.

No Direct Impact on Credit Scores

One of the unique aspects of title loans is that they typically do not directly affect your credit scores. Most title lenders do not report your payment history to the major credit bureaus. This means your on-time payments won’t help you build your credit score, but on the flip side, late payments are not reported against it either.

Late Payment Penalties

While title loans might not be reported to credit bureaus, missing payments can have serious consequences. Falling behind on your title loan payments can lead to your car getting repossessed, which can create a significant financial setback. Even though it doesn’t directly affect your credit score, it’s still in your best interest not to have late payment records.

Late Fees and Additional Costs

Title lenders can impose late fees and additional costs for missed payments, which can further strain your financial situation. Make sure you understand the terms and conditions of your title loan agreement to avoid these extra expenses.

Why should you pay off a title loan fast?

Paying off your title loan fast can positively impact your financial well-being. Here are some of the key benefits of paying off your title loan fast:

Reduced Interest Costs

Title loans often come with higher interest rates compared to traditional loans. By paying off your title loan fast, you can minimize the total interest you’ll pay over the loan term, ultimately saving you money.

Avoid Late Fees

Timely repayment ensures you won’t incur late fees, which can add up over time and strain your finances. By paying your title loan on schedule, you avoid unnecessary extra costs.

Improved Credit Management

While title loans typically do not directly impact your credit score, maintaining a good payment record can reflect positively on your credit management skills. It shows your ability to meet financial commitments responsibly.

Financial Freedom

Getting rid of a title loan means you’re no longer bound by the financial commitment it comes with. This freedom allows you to allocate your income towards other essential expenses or financial goals.

Tips on How to Pay Off Title Loans Fast

Because lenders typically do not check the borrower’s credit history for this type of loan, the main drawback of title loans is the higher interest rates they require. So once you take out a title loan, you want to pay it off quickly.

Here are a few tips on how to pay off title loans as soon as possible.

Don’t take the entire amount

You know the amount you need. Take only that. It may be tempting to take a higher amount than you need just because the lender offers it. However, it can give you a little wiggle room in paying off the title loan if you take a lower amount than what’s offered.

Figure the payments into your budget

You would want to pay off your title loan only as long as you have to. It might be tempting to roll your loan over into another term (if you can’t pay the whole amount off within the agreed-upon time frame). However, rolling over your loan will only raise the interest even more and prolong your financial suffering. So, pay off your loan on time by regularly setting aside funds.

Round up your monthly dues

A little amount goes a long way. If, for example, your monthly payment amounts to $182.50. Round it up to the nearest hundredth and pay $200 monthly instead. The measly $17.50 will add up over time and can help you pay off the title loan earlier than planned and save bucks in interest.

Pay extra at least once a year

Paying twice a month may be a challenge to some, so making extra payments is a good alternative. At least once a year, make an additional payment. You can use a year-end bonus or a tax refund for this. Using your bonuses for leisure can be tempting, but your future self will thank you for the sacrifice. 

Tighten up the budget temporarily

Eyes on the goal: pay off the title loan fast. This may mean returning to the drawing board to adjust your budget to the new debt you are paying off. Go through every item in your budget and see if there are areas you can cut on or remove altogether — streaming services, a pricey phone plan, takeout meals, and what have you. Plan your meals to make your food budget more efficient, and track your expenses properly. 

Hustle on the side

Remember, this is only temporary. And you aim to pay off the title loan as fast as possible. Seek opportunities to earn money outside of your day job. You can do freelance work, like writing, website design, or private tutoring. You can also sell clothes and items you no longer need. Renting out a space in your home could be a good idea if you have extra rooms.

Be honest

If you have difficulty paying off your title loan, contact your lender and let them know. They may be willing to renegotiate the terms of your loan. Most lenders will be open to this since paying off your title loan will be in their best interest as much as it is yours.


If you are having trouble paying off your title loan, you can replace it with a loan with lower interest rates. Simply put, take out a loan to repay another loan. However, for that to make sense, you need to ensure that the second loan you are taking out to repay your title loan has a lower interest rate. Getting a fixed-rate loan from your bank may help. Or you could visit your local credit union as another option.

Sell your car

This may prove difficult since you do not have a clean title for your vehicle because you’ve put it up as collateral for your car title loan. However, difficult does not mean impossible. You can sell your car, use the proceeds to pay off the title loan, and use the rest to buy a cheaper vehicle.

Final Thoughts

These are just some ways you can pay off title loans fast. One important thing to note is to never default on your loan. Remember, defaulting could mean losing your vehicle. Therefore, paying what you owe and researching when choosing loans are important.

Find a trusted lender with structures that new borrowers can easily understand. Payment1’s loan structures are designed to make payments more manageable. Apply for a loan now, or contact us for questions today.