Paying off a title loan early can help you save money on interest and regain full ownership of your vehicle faster. But before doing so, it’s important to understand your lender’s policy on prepayment penalties and the best strategies to shorten your repayment timeline.
At 5 Star Car Title Loans, we make it easy, there are no prepayment penalties, so you can repay your loan as fast as you’d like and save on total interest costs.
💡 Want Expert Tips on Getting Out of a Title Loan?
If you’re looking for the most effective ways to get out of a title loan, we’ve gathered expert advice from around the web and summarized it in one helpful guide.
Check out: Ways to Get Out of a Title Loan: What Experts Recommend
Many title loan companies carry prepayment penalties in their financing options, so check out to see if their company uses them before you agree to a loan
Can You Pay Off a Title Loan Early?
Yes, you can. The ability to repay your car title loan early depends on your lender’s terms. Some lenders charge a prepayment penalty, an added fee for paying before the due date.
That’s why it’s important to ask upfront whether your lender allows early repayment without extra costs.
💡 If you make payments larger than the required minimum, make sure they’re applied directly to the principal balance, not just future interest payments.
Why Paying Off a Title Loan Early Helps
- Save on Interest: The faster you pay, the less total interest accrues.
- Boost Financial Freedom: You’ll clear your lien sooner and get your title back.
- Reduce Stress: Fewer months of payments mean fewer chances of missing one.
- Improve Loan Eligibility: Paying responsibly can make it easier to qualify for future credit.
Avoid Paying High Interest Rates
Many title loans impose high-interest rates on customers. By the time a title loan is paid off, you’ll likely have given the lender more money than what you received because of the interest. You obviously don’t want to give the lender any more than you need to, but the only way to make sure this happens is by paying off your loan quickly.
The longer it lasts, the more money you’ll be shelling towards your loan payments.
💡 With 5 Star Car Title Loans It’s a great idea to pay off your title loan quickly because the faster you pay it off the less interest you need to pay on the loan!
Early Payoff Example: 2015 Honda Accord:
| Loan Details | Full Term (24 Months) | Early Payoff (6 Months) |
|---|---|---|
| Car Model | 2015 Honda Accord | 2015 Honda Accord |
| Loan Amount | $4,000 | $4,000 |
| Admin Fee | $90 | $90 |
| APR (Interest Rate) | 85% | 85% |
| Monthly Payment (Est.) | $365 | $825 |
| Total Interest Paid (Est.) | $4,760 | $950 |
| Total Cost of Loan (w/ Fee) | $8,850 | $5,040 |
| Total Savings from Early Payoff | — | $3,810 |
💡 By paying off the loan in 6 months instead of 24, the borrower saves over $3,800 in interest.
So, How Can You Repay a Title Loan Faster?
Ways to Pay Off a Title Loan Faster:
1. Round Up Your Payments
Even small overpayments add up.
Example: If your monthly payment is $157, pay $200 instead. That extra $43 reduces your balance faster, saving on interest over time.
If $43 feels too high, start smaller. Consistency is what matters most.
2. Take a Consolidation Loan
A debt consolidation loan can combine multiple debts into one manageable payment, often with a lower interest rate.
This approach may stretch your term but can simplify payments and reduce overall costs.
3. Downgrade or Sell Your Vehicle
Selling your car at market value can generate enough to pay off your title loan in full or at least reduce your balance.
If you still need transportation, you can purchase a more affordable vehicle afterward.
Always notify your lender before selling, as they hold a lien on the title until payoff.
4. Cut Unnecessary Expenses
Review your monthly spending and identify areas to reduce costs, subscriptions, dining out, or nonessential shopping.
Redirect those savings toward your loan payments to accelerate payoff.
5. Never Miss a Payment
Missing even one payment can:
- Increase your interest charges
- Damage your repayment record
- Lead to potential repossession
Set up automatic payments or calendar reminders to ensure consistent on-time payments.
Things to Consider When You Pay on a Title Loan Ahead of Time
If you have a title loan on your vehicle, you’re going to want to concentrate on paying it off as quickly as possible. While this may make for a financially uncomfortable situation in many ways, paying off a title loan early is going to present many advantages to you.
To pay off your car title loan early you’ll first need to consider a few things, such as:
- How much money do you have right now?
- How much of that money can be spared each month?
- How much money will you need to get this off your shoulders?
One big thing to think about is how much “extra” money you’ll have each month to devote to your bills. If you’ve taken out a title loan, to begin with, you’re probably already strapped for cash, but if you can spare any additional funds to the title loan each month – even if it’s just five or ten dollars – you’ll find yourself owing less in the long run.
Title Loan Prepayment with 5 Star Car Title Loans
Since 5 Star Car Title Loans doesn’t charge prepayment penalties, you can repay the loan as fast as you would like to. It’s a great idea to repay these loans quickly because the faster you pay it off, the less interest you’ll have to pay. Pick up the phone and call 5 Star Loans, we’d like to be there for you during these tough financial times.
