Call Us Today (844) 567-5011
Call Us Today (844) 567-5011
Call Us Today (844) 567-5011
Call Us Today (844) 567-5011
People take out online car title loans to pay for emergency expenses, and they often never consider the possibility of falling behind and having their vehicle repossessed. But any time you take out a secured loan, you risk defaulting on the payments and losing your vehicle. Not only that, but your credit will take a hit because of the repossession, and you may still owe the lender for any outstanding balance!
A title loan repossession is a legal process lenders use to reclaim vehicles that have defaulted on the lending terms. This confiscation differs from other forms because it does not use banks or other financial institutions but equity lending companies. A lender has every right to repossess your vehicle when you default on a title loan, but they must follow state and federal laws.
Multiple federal and state laws regulate title loan repossessions and what a lender can do after they take possession of the vehicle. For instance, title loan companies in Virginia have more ways to repossess a car versus lenders in Utah where borrowers have more protections once they default. Consider the following if a title loan company is threatening to take your vehicle because you've defaulted on the loan:
- What can your lender do if you default on the payments? Does your contract state they can take your vehicle if you miss a payment? Also, what are the regulations in your state regarding vehicle repossessions?
- How to avoid having your vehicle repossessed. The primary way to prevent a repossession is, of course, to make your payments on time. However, you can also ensure that your lender follows all applicable laws when repossessing a vehicle. Any slip-up on their part may invalidate the loan contract.
- How to get your vehicle back. You have a certain amount of time to claim your car and get it back after a title loan company repossessed it. Work with your lender to pay down the balance owed and get your vehicle back without having it go to auction.
- What happens if your car is sold at auction? This is the final step in the repossession process. Once a vehicle is sold at auction, you have minimal recourse to get the vehicle back. You can always bid on the car, but that's unrealistic. After the vehicle is sold, your lender must inform you if there's still a balance due or if they owe you money from the sale proceeds. Sometimes, your car's sale may not entirely pay down the loan balance, and your lender can still attempt to collect their debt.
Anyone considering a car title loan should understand the risks of using a vehicle as collateral for a loan. Imagine if you took out a rideshare driver loan and lost your vehicle! Or what happens if you need your car to get to work each day?
Never miss a monthly payment. Staying current avoids the risk of loan default, and you'll be able to keep driving your vehicle while the loan balance is paid down. Pay off the loan quicker by making all required payments and avoiding late fees.
- Communicate with your lender. Tell them if you can't make any required payments and work out an alternate arrangement. For example, a title loan company in Austin, TX, will work with you to reduce the monthly payments and lower the APR.
Do not skip any payments, and check your monthly statements for accuracy. There are all kinds of scenarios where a lender or third-party finance company makes an inaccurate notification of your account.
- Pay off the loan immediately and find a lender that offers no pre-payment penalty. Repay your loan early to get your vehicle back and avoid the high rates typical at the back end of the loan.
If you cannot make a payment, contact your lender. Tell them about your financial situation and explain that you risk missing the required payments. They may work with you to create a new payment plan or extend your due date. Also, consider refinancing your title loan or seeing if a company will buy out the existing loan.
A refinance can be a huge benefit for someone looking to get their APR down to a manageable level or reduce the time it takes to pay off the loan! It would be best to consider contacting a company offering a title loan buyout service. When a lender buys out your current loan, they pay the original loan company, and you can start fresh with a whole new lending arrangement.
Once your vehicle has been repossessed, the lender has to follow specific title loan laws in your state. These laws limit how long a lender or 3rd party collection agency has to repo your car and what they need to do after possessing the vehicle. Most importantly, these laws protect you from being harassed by lenders or collection agencies.
Online title loan lenders often have 45 days to notify you that your vehicle has been repossessed. After the notification period, they can sell the car at auction and use those funds to settle any outstanding loan balance.
Work with your lender on a repayment plan to get the vehicle back after it's been repossessed. The most likely solution to get your vehicle back will always involve paying the total amount owed. Your lender must legally tell you your car's exact title loan value and how much money you owe to get the vehicle back. This includes the amount due from missed monthly payments and additional fees for when your car was stored at a towing facility.
Any way you break it down, a title loan repossession amounts to a worst-case scenario when you initially inquire about taking out a loan. The fact is that any licensed lender can legally take possession of your vehicle and sell it at auction after the specified notification period has elapsed.
If you're dealing with a vehicle repossession, contact Car Title Loans 123 at 844-567-5011. We'll work with you to get the vehicle back!
