What to Do If Car Is Repossessed With a Title Loan?

Daniel Joelson

Daniel Joelson

Total Posts: 336

Published Date: June 22, 2024

Daniel Joelson has been in the consumer finance space since 1994, he has helped to develop underwriting manuals for the financial sector. With a vast amount of Knowledge in consumer finance, he has been writing articles for all types of loans. With his knowledge, he is able to help many people to answer different financial problems.

If you have taken out a car title loan, it is important to understand the consequences of defaulting on the loan.

One of the most significant consequences is the possibility of repossession. In this article, we will explore what to do if car is repossessed with a title loan, what steps you can take to avoid repossession, and how to navigate the aftermath of a repossession.

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Understanding Car Title Loans and Repossession

Auto title loan is a type secured loan where the borrower uses their car as collateral. The lender holds the title of the car until the monthly payments are complete.

If the borrower defaults on the loan, the lender has the legal right to repossess the car and sell it to recover the remaining balance of the loan, and comply with the title loan repossession laws.

If you have defaulted on your title loan, the lender may begin the repossession process. This typically involves sending a repossession agent to take possession of the car. The agent may use a tow truck to remove the car from your property.

FAQs About What to Do About Title Loan Repossession

What Steps Should I Take If My Car Is Repossessed Due to a Title Loan? If your car is repossessed because of a title loan, you should:

  1. Contact the Lender: Immediately reach out to your lender to discuss options about your car repossession. They might offer a chance to get your car back if you pay the overdue amount.
  2. Understand Your Rights: Know your state’s laws regarding repossession. Some states require lenders to inform you before selling the vehicle.
  3. Retrieve Personal Belongings: Collect any personal items from your car. Lenders are typically required to allow you to retrieve your belongings.

Can I Get My Car Back After Repossession? Yes, you might be able to get your car back after repossession by:

  • Paying the Outstanding Balance: Some lenders will return your car if you pay the past-due title loan payments amount and any repossession fees.
  • Redeeming the Loan: This involves paying off the entire auto title loan balance plus any additional fees.
  • Reinstating the Loan: Some states allow you to pay the overdue amount to reinstate the loan and get your car back, this will depend on the title loan lender.

How Can I Prevent Repossession of My Car in the Future? To prevent future repossession:

  • Communicate With Your Lender: If you are struggling and have missed payments, talk to your lender about possible options like extending the loan term or lowering payments, and avoid vehicle repossession.
  • Budget Carefully: Make sure you can afford the loan payments before taking out a title loan.
  • Seek Financial Counseling: Consider getting advice from a financial counselor to manage your debts more effectively.

Expert Quote “Repossession can be a stressful experience, but understanding your options and rights can help you navigate the situation more effectively. Always communicate with your lender and explore all possible solutions.” – Daniel Joelson, Consumer Finance Expert

What Happens After Repossession?

Once the car has been repossessed, the lender will typically sell it at auction to recover the remaining balance of the loan.

If the sale of the car does not cover the full amount owed, the borrower may still be responsible for the difference.

In addition to the financial consequences, repossession can also have a negative impact on your credit score. A repossession will typically stay on your credit report for up to seven years and can make it difficult to obtain credit in the future.

How to Avoid Title Loan Repossession

The best way to avoid car repossession is to make your loan payments on time. Title lenders do not want to repossess your car, and they will work with you to avoid a loan default.

If you are struggling to make your payments, it is important to contact your lender as soon as possible.

Many lenders are willing to work with borrowers to come up with a payment plan that works for their budget.

If you are unable to make your payments and are facing repossession, there are still steps you can take to avoid losing your car.

One option is to sell the car yourself and use the proceeds to pay off the loan. This can be a good option if you owe less on the car than it is worth.

Another option is to refinance the title loan with a new lender. This can be a good option if you are struggling to make your payments due to high interest rates.

It is important to do your research and make sure you are working with a reputable lender. All lenders need to comply with the CFPB.

Understanding Your Title Loan Agreement

When you take out a title loan, it is important to carefully read and understand the loan agreement. The agreement will outline the terms of the loan, including the interest rate, payment schedule, and consequences of defaulting on the loan.

It is also important to understand any grace periods that may be included in the loan agreement. A grace period is a period of time after a missed payment when the borrower is not yet considered to be in default.

If your loan agreement includes a grace period, it is important to make your payment as soon as possible to avoid repossession.

How to Deal with Title Loan Repossession

If your car has been repossessed, it is important to act quickly to minimize the financial impact. One option is to try to negotiate with the lender to get your car back. This may involve paying off the remaining balance of the loan or coming up with a payment plan.

If you are unable to negotiate with the lender, you may be able to buy back your car at auction. However, it is important to carefully consider the costs involved in buying back your car and whether it is worth it.

Working with a Title Loan Company

When choosing a title loan company, it is important to do your research and choose a reputable lender. Look for a lender that is licensed in your state and has a good reputation for customer service.

Before signing a loan agreement, make sure you understand the terms of the loan and the consequences of defaulting on the loan. If you have any questions or concerns, don’t hesitate to ask the lender for clarification.

Conclusion – What to do With Title Loan Repossession

Auto title loan can be a useful tool for obtaining quick cash, but it is important to understand the risks involved.

If you are unable to make your loan payments, your car may be repossessed and sold to recover the remaining balance of the loan.

There are steps you can take to avoid repossession and minimize the financial impact if your car is repossessed.

By understanding your loan agreement and working with a reputable lender, you can make informed decisions about your finances and avoid the negative consequences of defaulting on a car title loan.

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DISCLAIMER: As our policy to make sure you know what we do and what are our limitations, we offer you these disclaimers. We are NOT A LENDER and we do not make short term cash loans or credit decisions. We are a referral service and work only with licensed lenders/brokers.

We may act as the broker for the loan and may not be the direct lender. Loan proceeds are intended primarily for personal, family and household purposes. We do not offer or service student loans.

*Loan amounts by the lenders vary based on your vehicle and your ability to repay the loan.

*Since we do not lend money directly we cannot offer you a solicitation for a loan, except in the state of California. In all other serviced states we WILL match you with a lender based on the information you provide on this website. We will not charge you for this service and our service is not available in all states. States that are serviced by this Web Site may change from time to time and without notice. Personal Unsecured Loans and Auto Title Loans are not available in all states and all areas.

*Auto Title Loan companies typically do not have pre-payment penalties, but we cannot guarantee that every lender meets this standard. Small Business Loans typically do have pre-payment penalties and occasionally will use your car as collateral to secure the loan.

*All lenders are responsible for their own interest rates and payment terms. TFC Title Loans has no control over these rates or payments. Use of the work competitive or reasonable does not mean affordable and borrowers should use their own discretion when working directly with the lender.

*The amount of people who applied for a loan and we helped and those who received a loan is not the same. We cannot guarantee we will find a lender who will fund you.Just because you give us information on this web site, in no way do we guarantee you will be approved for a car title loan or any other type of loan. Not all lenders can provide loan amounts you may see on this web site because loan amounts are limited by state law and/or the lender. Some lenders may require you to use a GPS locator device on your car, active all the time. They may or may not pay for this or charge you for this. This is up to the lender and we have no control over this policy of the lender. Typically larger loans or higher risk loans use a GPS.

*In some circumstances faxing may be required. Use of your cell phone to receive updates is optional.

*Car Title Loans are expensive and you may have other ways to get funding that is less expensive. These types of loans are meant to provide you with short term financing to solve immediate cash needs and should not be considered a long term solution. Residents of some states may not be eligible for a loan. Rejections for loans are not disclosed to our firm and you may want to contact the lender directly.

*Car Title Loan lenders are usually licensed by the State in which you reside. You should consult directly with these regulatory agencies to make sure your lender is licensed and in compliance. These agencies are there to protect you and we advise making sure any lender you receive money from is fully licensed.

*Trading Financial Credit, LLC dba TFC Title Loans, Car Title Loans California, Dineromax. If you are using a screen reader and are having problems using this website, please give us a call at 1-844-242-3543 for immediate assistance.

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