What is the Worst that Can Happen if I Fail to Pay My Auto Title Loan?
A title loan can be a great resource to utilize if you need fast cash for a financial crisis. But, if you can’t pay it back, there are consequences. So, you might wonder, “what happens if I fail to pay my title loan?” The answer is a few things.
- The Title Lender Could Repossess Your Car and Sell it
- Your Credit Score Could Take a Serious Hit
Some things could cause you financial distress while you are repaying your title loan. Maybe you lost your job, or an unexpected bill knocked you down. Regardless of the reason why you are struggling, it can be beneficial to learn more about loan default and what happens if you can’t pay your title loan.
With Max Cash Title Loans, you can learn more about loan default and the steps you can take to avoid it.
What is Loan Default and What Happens if I Can’t Pay My Car Title Loan?
Loan default is when a borrower fails to make payments on their debt. When an individual signs a loan agreement, they agree to the debt obligation and the terms of their loan. These terms bind the borrower to the debt, so they are obligated to pay it back on time. Typically, when a loan is 30-90 days overdue, it is considered delinquent.
So if you are not paying back your loan on time, you are not fulfilling the obligations of your loan terms. Therefore, you should be concerned if you fail to pay a title loan.
When you sign a title loan agreement, a lien is placed on your car’s title. The title lender has a legal right to your asset during the repayment process since your car is used as collateral for the loan. If you do not pay back your title loan or default on your loan, the title lender has the right to repossess the asset and sell it to recover the remainder of the debt.
This is typically a last-case scenario, however, since repossession is expensive and difficult.
If I Fail to Pay My Title Loan, Will the Lender Take My Car?
If you are wondering, what if I fail to pay my title loan? Here’s what you need to know!
If you fail to make your title loan payments as agreed, the lender may have the legal right to repossess your car. This is because when you take out a title loan, you give the lender a lien on your car, which allows them to take possession of the vehicle if you default on the loan. In most cases, the lender will attempt to repossess your car as soon as you miss a payment, so it is important to contact your lender if you are unable to make a payment and try to come up with a solution before the lender takes action. If your car is repossessed, you may have to pay additional fees and costs, and you may still be responsible for paying off the remaining balance of the loan. It is best to avoid defaulting on your title loan if at all possible.
Vehicle repossession typically involves the lender hiring a repossession company to take possession of the car. The repossession company will typically track the car. When they find it, they will tow it to a secure location, such as a storage facility. The lender will then sell the car at a repossession sale, with the proceeds going to pay off the remaining balance of the loan. If the sale of the car does not cover the full amount of the loan, you may still be responsible for paying the remaining balance. Vehicle repossession can have serious consequences, including damaging your credit and leaving you without a car
What Can I Do To Avoid Loan Default and Pay My Title Loan?
Here are a few tips to avoid loan default:
- Look at the Terms: One way to avoid defaulting on a title loan is to ensure that you fully understand the loan terms before you sign. This means reading the loan agreement carefully and asking the lender any questions you may have. It’s important to make sure you can afford the monthly payments. Otherwise, you know what will happen if you can’t make a payment.
- Budget: Another way to avoid defaulting on a title loan is to budget carefully and ensure you have enough money to cover your expenses, including your loan payments. This may mean cutting back on non-essential expenses or finding ways to increase your income.
- Communicate: If you find yourself in a situation where you can’t make your loan payments, it’s important to contact the lender as soon as possible. They may be able to work with you to come up with a solution, such as refinancing the loan or extending the repayment period.
Can I Refinance My Title Loan if I Can’t Afford it?
If you are unable to afford your title loan payments, you may be able to refinance the loan to make it more affordable. This can involve extending the loan term. That will lower your monthly payments. Or, you could obtain a new loan with a lower interest rate. However, it is important to carefully consider the terms of any new loan before agreeing to it. Refinancing may not always be the best option. It may be better to try to negotiate a payment plan with your current lender or to seek assistance from a non-profit credit counseling agency.
It is best to contact your lender to discuss your options and to determine whether refinancing is possible in your situation.
How Can I Apply for Title Loan Refinancing?
Bottom line, as much as you might think you’re out of options, you are not alone. Take a deep breath and gain clarity about your specific situation. If it’s a short-term situation, the borrower may be able to ask for an extension on your payments and or adjust your monthly payments by negotiating with your loan provider.
If the borrower needs a longer-term solution caused by a life event, this may require a more extensive solution. Often, you can refinance your loan and extend the term to lower the payment or consolidate debt to free up some room in your budget.
Max Cash Title Loans Can Help!
Contact the title lender to let them know about your situation as soon as you can. The longer you wait to give them a call, the more debt, late fees, and expenses can accumulate, but it’s never too late to have an honest conversation.
Remember, you can only refinance your current title loan if your loan account is in good standing. Remember to take action before you default on a loan!
To apply for title loan refinancing, you will typically need to provide the following information:
- Your contact information, including your name, address, and phone number
- The make, model, and year of your car
- The current outstanding balance of your title loan
- Your income and employment information
- Your Social Security number
- Proof of insurance for your car
You may also need to provide additional documentation, such as a copy of your car title and proof of your ability to make the new loan payments. The specific requirements for refinancing a title loan can vary depending on the lender and your individual circumstances. It is best to contact the lender directly to discuss what is needed to apply for refinancing.
If you are interested in refinancing your current title loan, call a Max Cash Title Loan agent at 855-562-5626 today! They can walk you through your options and discuss the new loan terms with you if you qualify.5 The process to refinance a title loan is similar to applying for one. It doesn’t have to be complicated, and you don’t have to jump through hoops!
With Max Cash Title Loans, you can take advantage of:
- A Free Application Process
- A Quick Way to Get Connected to Title Loan Refinacing5
- Easy Approval5
- And Keep Your Car While You Pay Off Your Loan!
Click here to learn more about what Max Cash Title Loans can do for you! 5