If you are in need of fast cash and considering getting a title loan, you may have come across the term āBalloon Paymentā while researching your loan options online. Itās a good idea to have a sound understanding of what balloon payments are and how they could impact your loan experience, since balloon payments can be problematic for some borrowers.
How do Balloon Payments Work?
Balloon payments are large, one-time lump sum payments that are typically due at the end of the term of a loan, such as an auto title loan. The name is related to the fact that this large, final payment is significantly āinflatedā compared to the other regular loan payments, just like a balloon.
The primary problem with balloon payments is that they make it difficult for borrowers to pay off the loan at the end of the loan term, since the size of this final payment is significantly larger and might be well aboveĀ what they can afford that month.
When researching for the best title loan options in your area, it might therefore be worthwhile to find out if the loan comes with a final balloon payment or not.
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Can You Refinance a Balloon Payment?
If you currently have a loan that has a final balloon payment due, you might wonder if itās possible to refinance your balloon payment. Generally speaking, it is possible to refinance a loan with balloon payment as long as you can find a lender that offers a similar product to the one you already have, and is willing to roll your final balloon payment into the new loan.
For example, if you currently have an auto title loan with balloon payment, you can apply for a title loan refinance through a title loan serviced by LoanMart, and ā upon approval ā refinance your outstanding title loan including the final balloon payment!1
If you have applied for several refinance options and are not able to find a lender that can approve you for a refinance of your balloon payment, your best next bet might be to explore if your existing lender offers any type of loan forgiveness options.
Do Title Loans Serviced by LoanMart Have a Balloon Payment?
With all the potential downsides of balloon payments to borrowers, the good news is that car title loans serviced by LoanMart donāt have any balloon payments. Therefore, thereās no need to stress about having a final payment due that you canāt afford!
In line with our customer service mission, LoanMart strongly believes in only servicing auto title loans without balloon payments that provide excellent customer service and benefits.
Now that you understand more about title loans and balloon payments, you can decide if a title loan without balloon payments could be right for you.
