Debt settlement may appear like a solution to get out of your credit card debt, payday loans, medical bills, but using the same opportunity for an auto title loan may sound a little weird. However, as per your negotiation skills, account balance, credit score and willingness to pay, you do hold a chance to settle your auto loan lender for around 25% to 75% of the loan.
Debt settlement can work in two ways- first, you need to make use of a debt settlement company or second try to settle the debt on your own. If you choose to go by means of a debt settlement firm, you will have to provide the info about what you owe and who’s the lender you have to make the payment to! The moment you make the payment to the debt settlement company, they keep the money in a savings account. Once the account balance reaches a desirable amount, the company transfers it to your creditors to provide an offer to settle the debt. It could be a flat sum or a relevant percentage of the sum you owe. Once evaluated, the debt settlement company will pass it to your creditors.
If you choose to go for a debt settlement procedure on your own, you can easily make a call to the creditors and bargain for a settlement price. However, you must remember that you will have to be prepared to make a hefty payment on which the creditors agree upon. Usually in most of the cases, the collectors you negotiate with automatically provide you the permission to pay an amount as less as 75% of the money owed.
Important suggestions to keep in mind!
Settling a debt with an auto loan lender is a little different than the others. Firstly, the lender will not negotiate with you till you loan has been defaulted. They will endeavor their best to get you pay the real amount before they settle for something lesser. Loan amount on auto usually is high which means that the lender surely wants every penny back.
One of the biggest differences between getting credit card help and settling car loan is that the lender holds your vehicle’s title and has every option to repossess it, recoup its parts, sell it at an auction or just do anything. This brings them in a better negotiation position. They know that the buyer will not give on the car and thus they have a more bargaining power. A benefit standing for the debtor is that the title car lenders do not report the credit agencies so, in case you have a poor credit score, it won’t make much of a difference to them.
If the lender doesn’t want to bargain then it is okay to be persistent. Keep bargaining till you and the lender settle to a reasonable amount that you can pay. It is advisable to have settlement written and ensure that you pay the negotiated amount in the given amount of time. If you default the settlement, then you won’t get another chance to get loan.