Can you Refinance a Title Loan?

The topic of refinancing title loans can often be a bit confusing. On one hand the ability to lower the interest rate, payment, and total loan cost on an existing title loan can be a big help, especially for borrowers who rushed into a loan with a very high interest rate.

On the other hand refinancing a title loan is not permitted in all states and therefor not available to all borrowers. Nevertheless, if you have an existing title loan with a payment that is not affordable it may be a good idea to consider a title loan refinance.

So the answer to ‘can you refinance a title loan?’ is yes, assuming you reside in a state that permits these and you can meet the requirements for doing so. We’ll cover those shortly, first, what factors are there to consider when refinancing a title loan?

Factors for Refinancing a Title Loan

Borrowers may want to consider refinancing their loan for a number of reasons which we’ll cover shortly. So what factors are considered by the lender when entering such a transaction?

High level title loan refinance factors
The two main factors for refinancing a title loan include the vehicle and the existing loan.

Vehicle Information

The first item to consider is the vehicle value. As with all title loans vehicle value is an integral part of determining the loan amount.

The good news for borrowers is that used car values have increased significantly over just the past year. This play a major role in how much you can borrow; if refinancing for a larger amount then this may be very important.

Existing Loan Details

The next item to consider is the exisitng loan. This includes:

  1. Existing loan amount
  2. Term (Length)
  3. Payment history
  4. Current standing
  5. Outstanding balance

By current standing we mean whether or not you are currently in good standing with the lender. This means you are up to date on all payments and meeting all terms and conditions spelled out in the loan agreement. If this is not the case it may be difficult to refinance the loan.

refinance factors
Refinance factors include both vehicle related and existing loan related.

Refinancing Requirements

The final item to consider is your requirements for refinancing. Obviously one requirement should be a lower payment and ultimately a lower total loan cost. If the transaction will not save you money in the long run then what is the purpose?

requirements for refinancing a title loan
Car title loan refinance requirements can include payment history.

Car title loans should be short term solutions to financial problems. Refinancing just to extend the short term solutions into a long term problem is not recommended and goes against the general idea for using title loans to solve problems instead of create them. Responsible lenders will communicate this fact effectively.

Are there Additional Requirements?

Considering a title loan refinance frequently leads to the question about additional requirements. If you are refinancing an existing title loan, it means you must have met the requirements to get the loan in the first place.

The main requirements will be the same as getting the original title loan:

  1. Vehicle
  2. Lien free title
  3. Ability to repay the loan

The only real additional requirements are related to the standing of the existing loan. The payments need to be up tot date with preferably no late or missed payments. Refinancing a title loan that is not in good standing may not be possible.

Online Options

Some other questions to consider are related to online options for refinancing a title loan. Often you can find a title loan company online that may offer a better deal on a loan with a lower rate and lower total loan cost.

The ability to refinance this car title loan completely online with no inspection or store visit is usually preferred. This allows borrowers to complete the entire transaction online without leaving their home.

How to Refinance a Title Loan

Once you decide that a title loan refinance may be in your best interest, the next question is how do you refinance the loan? We created a page dedicated to title loan refinance that explains how to go about the process.

This includes many of the same steps as getting the best title loan, like:

  1. Finding the best lender
  2. Determining vehicle value
  3. Caluclating loan cost
  4. Comparing lenders
  5. Optimizing the loan term

Just like always these preparation steps can help save a significant amount of money and avoid some of the mistakes that occur as a result of rushing.

Summary

In summary, the answer to ‘can you refinance a title loan’ is yes, assuming you meet the requirements to do so. These requirements include residing in a state that permits refinancing.

Additional requirements are similar to those for getting the original loan. Not only can you refinance a title loan, doing so can often save a significant amount of money. In some cases you may be able to repay your title loan and get your title back much faster with a lower interest rate.