A cash-for-keys agreement is common with foreclosures and with bank purchases of foreclosed homes. This option saves time and money compared to an eviction process.
Homeowners considering this approach should consult a foreclosure lawyer. They can also contact a HUD-approved housing counselor or local legal aid group for advice.
No Credit Checks
A cash-for-keys agreement is a deal between a landlord and tenant for the former to leave a property on an agreed-upon date in exchange for money. Landlords sometimes offer this to tenants who are delinquent in paying rent. It can help the landlord avoid a costly eviction and find another tenant who will pay on time.
Banks often use a similar policy after foreclosures and evictions, and they may also offer a cash-for-keys deal if they buy the home at auction. It helps them recover their investment quickly and prevents damage to the property by an angry homeowner or tenant.
Title loan lenders are not usually interested in running a credit check to determine whether you qualify for a loan. Instead, they focus on your ability to repay the loan based on the equity in your vehicle. A borrower must have a car that is paid off and has enough equity in it to cover the loan amount plus the interest rate.
Most lender websites have an online application that is simple to fill out, and some even provide a free quote to see how much you can borrow. A borrower will need to provide their vehicle’s title, a valid photo ID, proof of income, and insurance coverage. A borrower will also need to sign a contract agreeing to pay off the loan in full when the term ends, typically in 30 days.
In most cases, the amount borrowed will be up to 50% of the value of your vehicle. Many lenders also require that borrowers be the sole owner of the vehicle and be able to prove it. Some lenders also install a GPS device, known as a kill switch, in vehicles to make it easier for them to seize a vehicle from borrowers who fail to repay their loans.
McClary recommends homeowners who are considering a cash-for-keys arrangement talk to an attorney first. A lawyer can explain the foreclosure process in their state, and they can advise about how long homeowners are legally allowed to stay in a foreclosed home. Those who cannot afford an attorney can call HUD-approved housing counselors or a local legal aid group for advice.
When landlords find themselves dealing with nonpaying tenants, they may choose to offer cash for keys as a way to get the tenant out quickly. This method is less expensive than pursuing an eviction in housing court, and it can also help prevent any major damage to the property during the move-out process. It can be difficult to determine an appropriate cash amount, but a fair offer may help you avoid any further problems.
It can take 3 to 4 weeks to evict a tenant from a residential rental, and it can be much longer if the tenant fights the eviction process. Some tenants even refuse to leave when they’re ordered to do so, resulting in long legal battles that can cost thousands of dollars. The new owner of a foreclosed home may also find it easier to pay the former homeowners for their belongings and allow them to move out peacefully than go through a lengthy and costly legal battle.
The best car title loans will be quick, but they’re not the only options. If you’re in a hurry for some cash, you can try other types of personal loans or payday alternative loans, which are available at some credit unions and banks. These loans typically have lower APRs and don’t require as much paperwork.
You may also want to look into installment loans, which allow you to borrow a lump sum and pay it back in fixed monthly payments over a period of months or years. These loans are often easier to qualify for than payday alternatives, and they tend to be more affordable as well.
If you’re a homeowner facing foreclosure, you might be able to get assistance from your bank or the government’s HUD office. They can provide you with free counseling services to help you understand your situation and the options available to you. They can also review any offers you receive from a bank, making sure they’re looking out for your interests. They can also refer you to attorneys who specialize in foreclosure law. NerdWallet recommends consulting an attorney before deciding on any financial solutions, including a car title loan, as you should always have a backup plan to meet your obligations.
No Risk to Your Vehicle
A vehicle title loan allows you to leverage your car’s value in exchange for immediate cash. However, it carries significant risks, especially for borrowers who cannot meet their payment obligations. The lender can repossess your car if you fail to repay the debt as agreed in your loan agreement. It may also charge you additional fees for late payments, which can quickly add up. While all loans come with risks if you don’t repay them on time, title loans carry particularly troubling consequences.
If you’re considering a vehicle title loan, consider alternatives to car repossession. You can find personal loans from banks or credit unions, and these typically don’t require a credit check. You can also use your credit card to get a cash advance, which comes with a slightly higher interest rate but is typically lower than a car title loan.
In the current pandemic environment, many people are losing their incomes and struggling to make ends meet. For some, this has resulted in delinquencies on their rent. In some cases, landlords and tenants have reached an impasse where eviction is the only option. However, the process is lengthy and expensive. In addition, it’s possible that the tenant could hire a lawyer and fight the eviction in court, which can prolong the process even further.
To avoid a costly and prolonged eviction, some landlords are offering cash for keys deals. These agreements are a direct transaction between the landlord and the tenant, and there’s no need for a constable to oversee the process. In addition to offering cash, some landlords are willing to work with their tenants to renegotiate back rent payments or provide partial rent forgiveness.
This solution can be a win-win for both parties, as it avoids the expense of eviction and gives the tenant more time to move out. Landlords should always follow applicable laws regarding the termination of tenancy, though, and they should give their tenants at least 30 days’ notice before terminating their leases. Additionally, landlords should be sure to give their tenants a copy of the agreement in writing so there are no misunderstandings or disputes.
No Legal Issues
While many lenders use these loans to help their borrowers get back on track after a financial emergency, some of them use the money to profit from people’s desperate need for fast cash. This is why it’s important to understand how they work before you apply for one.
The typical car title loan lasts for a month and is secured by your vehicle. If you fail to repay the loan, the lender can repossess your vehicle and sell it. However, in the case of nonpayment due to unforeseen circumstances, such as an illness or a job loss, most lenders will give you more time before they repossess your vehicle.
If you’re a landlord with a difficult tenant, you might want to consider the “cash for keys” option instead of going through an eviction. This method can save you both time and money, and it is generally less stressful for all involved. But the process can be complicated, and it’s not right for every landlord.
Before deciding on a cash-for-keys deal, you should determine the amount you’ll offer your tenants to leave. This figure may vary depending on the situation and your location’s cost of living. It’s best to avoid extortionate amounts and aim for a fair price. Tenants who will be evicted anyway might not need as much encouragement, while those with the means to wait out their lease could demand higher offers.
In addition, you’ll need to think about the timing of your move-out date. It will take an average of 3 to 4 weeks to evict residential tenants in Florida, but this timeline can become longer if the tenants file a response or hire a lawyer. A cash-for-keys deal allows you to skip the eviction process altogether and recover your property more quickly.
The CFPB’s investigation of TMX Finance in 2016 was in part spurred by complaints about the company from Georgia Watch, an advocacy group. The agency fined the company $9 million, but that didn’t affect individual borrowers. However, the CFPB’s decision did highlight the need to better educate consumers about how these types of loans work.