When unpaid bills are about to go into collections, a title pawn might be the solution you need to protect your credit score. You can prevent bad credit with title pawns by getting emergency cash to pay your late bills before they go into collections.

In this guide from Alabama Title Loans, Inc., we will explain how to avoid collections with title pawns. We will explain what it means to have debt go into collections, the negative impact on your credit score, and how you can avoid this outcome with a title pawn in Alabama.

What Does It Mean When Your Debt Goes Into Collections?

The United States currently has the most debt in its history, at $17.5 trillion. The average American adult has $66,772 in debt, with 77% of American households having some debt. Inflation and rising costs have contributed to the amount of debt the average American faces; many are struggling to pay their bills while making debt payments.

If you fail to make a debt payment for many months, your debt can go into collections. While there is no specified amount of time, most creditors will put your debt into collection after 120 to 180 days of missed payments. They will send your account to a collection agency, which is a third-party company that collects overdue debt.

Rather than dealing with a more flexible creditor, you must deal with a collection agency whose only goal is to get the money back. They will hound you for the money you owe by sending letters and demanding the money back in a timely manner.

What Are The Negative Impacts Of Debt Going Into Collections?

On top of dealing with more aggressive debt collectors, this can cause significant adverse effects on your finances. It’s well known that your debt going into collections can cause a steep decline in your credit score. Failing to make payments can already reduce your credit score (your payment history makes up 35% of your score), and your debt going into collections can have a long-lasting effect on your credit.

The steep decline in your credit rating can affect your ability to borrow money. Banks will not lend you house and car loans. Credit card companies are unlikely to approve you for a new card with reasonable rates when your debt is in collections.

You could also get sued if you fail to settle your debt in collections. This can lead to the debt collector garnishing your wages or extracting money directly from your bank account to pay your debt.

How Can You Avoid Collections With Title Pawns?

If you have failed to make debt payments and are worried about your debt going into collections, you can prevent bad credit with title pawns. They are secured loans that let you use your lien-free car title as collateral to borrow up to $15,000 in emergency cash.

You can quickly borrow money using a title pawn in Alabama and use emergency cash to pay debt. You can avoid collections with title pawns by making payments on time. This will also register a regular payment on your credit report, meaning your cause uses your title pawn to avoid bad credit.

Can You Prevent Bad Credit With Title Pawns?

One of the reasons your debt going into collections is so impactful is because of how it reduces your credit score. You can prevent bad credit with title pawns by making your payment and reducing the credit impact of your debt going into collections.

You may worry that borrowing money through title pawns will reduce your credit score, as getting a traditional loan can reduce your credit by adding a new debt onto your credit score. At Alabama Title Loans, Inc., we do not report your title pawn to the three major credit bureaus.

That means borrowing money with us will not affect your credit score. You can borrow money without having to worry about it tanking your credit score. However, paying back your title pawn will not increase your credit score since we do not report any part of the process to the credit bureaus.

How Can You Get Emergency Title Pawns For Unpaid Bills?

Are you facing your debt going into collections? You can get emergency title pawns for unpaid bills to avoid this happening. At Alabama Title Pawns, we have a simple approval process that can allow you to pawn your car title in less than a day.

We require minimal items, including your driver’s license, lien-free car title, and vehicle, to get approved. As long as you have fully paid off your car and have the required items, you should be able to get approved easily. We even allow borrowers to qualify for title pawns for bad credit without making an in-store visit!

The following are the steps involved in the title pawn approval process:

1. Apply Online: Start by filling out the on line form. This form doesn’t commit you to a loan but helps us understand your needs.
2. Speak To A Loan Representative: We will call you to discuss the details you provided on the online form. We will also answer any questions you have and agree to meet you at a convenient location for an in-person meeting that takes less than 30 minutes.
3. Prepare Your Documents: You’ll need a government-issued ID, the lien-free title in your name, and your vehicle for a quick inspection.
4. Vehicle Inspection: We’ll arrange a quick inspection of your car, either at one of our locations or at your home or office. We will also verify that you have the other required items.
5. Receive Your Cash: If approved, you can sign documents to complete the process. You could receive your money on the same day or the next business day!

Get A Title Pawn In Alabama – Borrow Up To $15,000 Today!

You can avoid collections with title pawns to prevent your credit score from tanking and getting sued. Alabama Title Loans, Inc. has quick title pawns available in less than a day to those who meet the requirements.

We offer fast and easy title pawns that provide the funds you need to keep your credit intact. Apply online now or give us a call to get started!

 

Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.