Car title loans can be useful for getting emergency cash in a pinch, but they are an expensive way to borrow money. Here are some tips on how you can make sure you manage your finances properly after taking out an auto title loan.
1. Make Sure You Repay Your Title Loan in Full
Above all else, prioritize repayment of your title loan. If you don’t pay, your car could be repossessed, which could cause a lot of other difficulties, such as problems getting to work. Make sure you have the cash on hand to repay your loan when it comes due.
2. Create A Budget & Trim Unnecessary Expenses
Next, you should try to create a budget. Track every dollar you earn, and every dollar you spend. Think about how you can trim down on unnecessary expenses – purchases of clothing and electronics, going out to eat instead of cooking at home, and so on. You can learn more about budgeting here.
3. Start Paying Down Other Debts
Next, you should start paying down any additional debts you have. Pay the minimum on all your debts and put any extra cash you have toward the debt with the highest APR (interest rate). Once that’s paid off, move onto the debt with the next highest interest rate. This is called the “debt avalanche” method, and it’s the best way to pay down debts quickly.
4. Consider Boosting Your Income
If you can find a new job that pays more, get more overtime hours at work, start a “side hustle,” or do things like drive for Uber or GrubHub for some extra cash, this is a good way to boost your income. You can send all of this cash directly to any remaining debts you have.
5. Save Up an Emergency Fund
Once you’ve started budgeting and begun paying down your debts, you’ll free up some extra cash each month. You can use this money to start an emergency fund – if you have some money saved up, you won’t need to take out another title loan if you have an unexpected expense!
Follow These Tips to Get Back on Track After Getting Auto Title Loans!
Getting your finances back on track after a title loan may seem difficult, but with these tips, you can ensure a healthy financial future. Think about what you’ve learned and start getting your finances back on track right away!