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What happens when someone defaults on a car title loan? What are the options? How do they get their vehicle back?
Car title lenders have helped out a lot of people with financial issues fix up and moved forward with their lives.
With fast and easy steps to get title loans, it is important to know what you are getting into, and also how to get out of it.
Choosing a title loan company that has multiple locations, and that have many years of experience will help you.
The small title lenders are not as flexible, neither do they have the experience to help you to get back into your title loan if you have defaulted.
Car title lenders help make the process of obtaining a car title loan easier and faster. Car title loans are quick loans, also known as pink slip loans, which are gotten in exchange for your car as collateral.
Make sure you know what you can do if making the monthly payments, are there any prepayment penalties? And how will it affect your credit score?
This loan, however, is meant to be paid back to the lender after a period of time, based on the agreed monthly payments.
However, a lot of people are not knowledgeable about the consequences of defaulting on this contract and not paying their debt.
After a loan is issued to an individual, which is usually the car owner, a monthly payment plan is agreed upon between the lender and borrower.
This monthly payment plan is meant to be adhered to by the borrower, a default occurs when there’s a violation of the agreement.
Any action that doesn’t connote with the laid down terms is a default on a car title loan. It could be a refusal to make the full payments of a loan, or a reduction of the monthly payment made.
It could, also, be no payment at all from the borrower. Each of these scenarios is a default on a car title loan.
The consequences of defaulting on a car title loan are inevitable because it is all on contract.
When you register for a car title loan, you make use of the title of the car, which allows the lender to sign in as the lienholder of the car.
This leaves two options for the lender if you default on the repayment plan. He can either;
Even though this is your fear, a lot of lenders would rather consider working with you to make your payment, because it is less strenuous.
The process of getting your car, filing papers, and selling it at an auction is long and tiring, however, it does happen sometimes.
Getting your car repossessed by a lender can be disheartening, however, there might be hope. If you’re late on payment of your car title loan, your lender will usually send you a notice for the repossession of your car.
You can reach out to your lender and work out a payment plan that is suitable or possibly pays off some of the money.
If these options are not possible, your only option is to hope your lender can auction your vehicle for a price above your loan.
This money should, also, be above the fee spent in filing your papers as well. Your lender is legally obligated in some locations to give you whatever money is left from the money acquired after auctioning off your vehicle.
Whatever the case may be, it is always advisable to call your lender the minute you realize you cannot keep up with the payments. Communication is always the best option in situations like these.