What Happens When You Stop Paying For Your Title Loan. Online title loans have provided financial safety nets for millions of vehicle owners in the United States. Although vehicle title loans offer a variety of benefits, one of the potential drawbacks of these types of loans is the actions that can take place if customers […]
What Happens When You Stop Paying For Your Title Loan.
Online title loans have provided financial safety nets for millions of vehicle owners in the United States. Although vehicle title loans offer a variety of benefits, one of the potential drawbacks of these types of loans is the actions that can take place if customers don’t pay back a title loan.
Since your vehicle is one of your most valuable assets, you might be wondering what will happen if you don’t pay back a title loan. Before we discuss your options if you are not able to repay your loan, you must understand the way in which vehicle title loans are structured.
What Are Car Title Loans?
Car title loans have been in existence for almost 30 years. These short-term loan solutions provide a way for customers to leverage the equity in their car for cash.
This cash can be used for anything from paying for emergency expenses to buying a new computer. The cash loan is repaid to the title lender in a series of fixed installments.
The title lender provides the customer with cash in exchange for a copy of their car’s title. To protect their financial interests in the vehicle, the title lender places a short-term lien on the vehicle.
The purpose of the lien is to guarantee that the title loan will be repaid. The lien gives the lender legal rights to repayment if customers don’t pay back a title loan.
Consequences of Defaulting on a Car Title Loan
Vehicle title loan contracts are clear about the terms of the loans and due dates. Sometimes customers experience financial hardships that prevent them from paying the loan installments on time or at all.
With car title loans, the installments are due on the date that is written in the contract. There are usually no grace periods with car title loans.
One of the unfortunate consequences of securing car title loans is vehicle repossession. Your lender has the legal authority to begin the repossession process the day after a payment has been missed.
The truth about automobile repossession is it costs a lot of money to take your car. Our company’s goal is to make vehicle repossession a last resort.
If you can’t pay back your vehicle title loan, we make every effort to help you through this difficult time. We will try to devise a mutually beneficial arrangement with you.
One of your options that might be available to you is a title loan refinance agreement. If you have an existing loan from another title lender, we could assist you with getting title loan relief.
When you are approved for a car title loan refinance, our company will pay off your existing title loan. There are a few benefits of taking this action.
- You can apply for a loan with more affordable terms than the original title loan.
- If your payments are behind, you can prevent automobile repossession.
- You can get a fresh start with a new loan.
If you are in a situation that makes it difficult for you to repay your vehicle title loan, you should take strategic actions quickly. You have a few options that can solve your problem if you act in a timely manner.
Vehicle Title Loans FAQ
Vehicle title loans are one of the easiest types of loans to obtain, but they can be difficult for many people to understand. The responses to the following questions about car title loans will help you better understand these types of loans.
Why are title loans considered to be short-term loans?
Car title loan interest rates are higher than loans from banks, credit unions and other financial institutions. To make car title loans affordable, the duration of these loans is only for a few months.
How can I tell whether I have a short-term or long-term financial condition?
When you apply for a car title loan, it is easy to convince yourself that you will be able to repay the loan. Unless you honestly assess your situation, you could be setting yourself up for future financial challenges. Short-term financial challenges include experiencing a financial shortfall until your next payday and an unexpected expense. Long-term financial challenges include a job loss, under earning at your current job and recurring financial problems.
How much money can I borrow?
Your loan offer is dependent on the current value of your vehicle. To get an estimate of your vehicle’s value, you must complete a short application.
Can I repay my loan early?
Absolutely. You can repay your loan without early payment penalties.
Am I eligible for a vehicle title loan?
Our eligibility requirements are straightforward. You must be at least 18 years old with a recurring source of income. Your vehicle’s title must be free of any liens or financial obligations. You must have a valid state-issued identification such as a driver’s license or an ID card.
To learn more about our car title loan solutions, contact a representative or apply for a loan today.