People take out online car title loans to pay for emergency expenses and unexpected bills, and it’s safe to assume that many of these borrowers never suspect their vehicle can be repossessed. But having a lender take your car is a real possibility if you default on the loan or even miss one or two payments. Because of that, you need to know what a title loan repossession is and what to do if you find yourself in this situation!
A title loan repossession is a legal process used by lenders 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 rather 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.
Several laws govern title loan repossessions, including state-level and federal regulations. If your vehicle has been repossessed, it is important to understand what these laws entail and how they may affect you. These laws and regulations will often change, and most regulate how much time a lender or 3rd party collector has to repo your car and what they need to do after taking possession of the vehicle. Some things to consider include the following:
– What actions can be taken against you if your vehicle is repossessed?
– How can you avoid this situation in the first place?
– What steps do you need to take to get your car back from the lender?
– What can I do after a lender legally takes my car and sells it at auction?
If you are considering taking out a loan using a vehicle as collateral, it is essential to understand the risks involved and how to protect yourself. By researching companies and being aware of the laws governing repossessions, you can help ensure that this process does not negatively impact your life. Anyone facing a situation where their car will be repossessed in a tough spot. But imagine if you took out a title loan as an Uber driver and lost your vehicle! That’s why you want to do all you can to get back on track with the monthly payments!
There are a few things you can do to avoid having your vehicle repossessed:
– Make your payments on time, every time. By staying current on the required payments, you avoid the risk of loan default. Besides, you can pay off the loan quicker than if there were a few missed payments.
– Stay in communication with your lender. Always contact your customer service rep and let them know if there’s any risk that you may fall behind on payments. Keeping an open line of communication is vital to avoid a drastic situation where you lose your vehicle.
– Do not skip any payments; always check the monthly statements for accuracy. Everyone makes mistakes, and there are all kinds of scenarios where a lender or 3rd party finance company misses a payment or makes an inaccurate notification of your account.
– Pay off the loan as soon as possible and find a lender that allows fast upfront payments with no pre-payment penalty. By making early title loan payments, you can get the vehicle back quickly and avoid the high rates common at your loan’s back end.
You must immediately reach out to your lender if you cannot make a payment. They may be willing to work with you to create a new payment plan or extend your vehicle title loan due date. Another option for borrowers in this situation is to consider refinancing their car title loan with another lender or seeing if a company will buy out the existing loan. A refinance is the likely option, as most companies will pass on a buyout for a loan that may default.
A refinance can be a huge benefit for someone looking to get their APR down to a manageable level or reduce the amount of time it takes to pay off the loan! You should also consider reaching out to a company that offers 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 much time a lender or 3rd party collection agency has to repo your car and what they need to do after taking possession of the vehicle. Most importantly, these laws protect you from being harassed by lenders or collection agencies.
In general, an online title loan company will have anywhere from 30 to 60 days to notify you that your vehicle has been repossessed, and they may contact you during this time to try and collect payment. After the established notification period, the lender can sell your vehicle at auction and use the proceeds to pay off the outstanding balance on your loan. If the auction does not cover the full amount owed, you may be responsible for paying the remainder of the debt. On the flip side, if the car sells for more at auction than it’s worth, then the lender legally must send you the full balance after subtracting the repo and auction fees.
If you want to get your car back after it’s been repossessed, you will need to work with your lender to explore all your available options. In some cases, the title loan company may be willing to accept a partial payment or allow you to begin making payments on the outstanding balance. The most likely solution to get your vehicle back will always involve paying the full amount owed. Your lender is legally required to tell you the exact title loan value of your car and how much money you must pay to get the vehicle back after it’s repossessed. This amount will include the original amount due from missed monthly payments and additional fees for when your car was taken and 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 of the matter is that any licensed lender can legally take possession of your vehicle and sell it at auction after the specified notification period has elapsed. Take action if you find yourself in this situation, and remember that you always have options, and auto title loan companies must adhere to state laws throughout the process. If at any point you feel like your lender is not playing by the rules or simply refusing to work with you, do not hesitate to reach out to your state’s financial regulator for help!