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Published On: Thu, Jan 19th, 2017

Auto Title Loans And Debt Settlements

Debt settlement stands out as a really interesting solution that is available for those that want to eliminate different debt types that appeared in the past. Using auto title loans in Anaheim is something that is normally considered but if you do not know what you do, the entire situation becomes worse. Everything is basically based on bank balance, what you are willing to pay and negotiation skills. The settlement with the auto title loan lender can actually make your deal with everything at an amount that is up to 75% of the money owed.

How Debt Settlement Works

Debt settlement will basically work in two ways:

  • Settling the debt alone
  • Using the services of debt settlement companies

photo supplied/ bankruptcydocumentslibrary.com/

Using the firms that are specialized in debt settlement offers important information about everything that you owe and the lenders that you have to deal with. Payments are normally going to be made directly to settlement companies. They are going to basically put money in a special savings account. After the balance reaches the pre-agreed amount, the creditors are called and settling the debt is done. This is normally a percentage of the amount owed but it can also be a flat fee.

Trying to go through debt settlement alone means you get in touch with your creditors and you then negotiate settlement prices. It is obvious that you have to offer a full lump sum that is agreed to by both parties. Collectors can reduce debt owed but this will depend a lot on how negotiations go.

Using The Auto Title Loan

When you want to settle the debt by using the auto title loan the process will be a little different. Lenders will not negotiate until the loan is defaulted. You basically are going to be pressured to pay before a lesser amount is going to be agreed. Auto title loan amounts normally go up to $5,000. This money will be wanted back.

With the auto title loan we see the lender holding vehicle title. At the same time, he has the option to repossess a vehicle and even sell it in order to get back a part of the loan back. That practically means their negotiation position is a really great one. Since you would not want to lose car ownership, the bargaining power of the owner is lowered. However, title lenders will usually nor report the loan to the credit bureaus. When settling the credit score will not be affected.

Conclusions

At the end of the day the most important thing to take into account is the situation you are in. You want to do the math so you can see if it is a good idea to use the auto title loan for debt settlement. In most situations the negotiation that happens with the lender is the most important part of the process. The truth is that most people do not really have the knowledge needed for proper negotiations. Make sure that you solve that and that you learn all that you can about debt settlement so that you can get an edge in negotiations.

Author: Lolita Di

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