What Happens When You Default on Car Title Loans?

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If you missed a payment on your car title loan, you may be worried about defaulting on the loan. At Max Cash Title Loans, we are happy to educate you on the dangers of defaulting on a loan, and what you can do to prevent loan default! 

How Many Missed Payments Considered Default on Car Title Loans?

Defaulting on a loan means that the borrower has failed to make payments on the loan. Depending on your state, this could be after 30 days, or after 90 days. All loan contracts subjected to those specific state laws.

Regardless of the time frame, defaulting on a title loan could mean that your vehicle is repossessed. While that does not always happen, it is important to understand the ins and outs of defaulting on a loan to prevent it from happening to you. If you are currently falling behind on loan payments in the repayment process, you have options and resources to consider! 

Title loans Oswego Illinois
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What it Means to Default on Car Title Loans

Title loans are known by a few names, including pink slip loans, title pawns, and auto title loans.

Title loans are short-term loans or long-term loans that allow a borrower to use collateral to obtain funding.

Since title loans are secured loans, collateral is used to obtain one. The collateral for the loan is the vehicle title, and the lender becomes a lienholder to the title. This means the lender has a legal right to the collateral if the borrower defaults on the loan. Until the loan has been repaid in full, a lien, or right to the asset will remain on the title. The title loan lender has a legal right to repossess your car, and it is considered illegal in most states to hide your vehicle from them if you default. If you attempt to hide your vehicle, it could result in legal trouble.

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When a borrower signs a loan, they agree to repay the loan amount, including the interest rates and any additional fees with the loan. Failing to make the monthly payment will mean the contract is broken. This can lead to repossession. 

Defaulting on a loan will also mean your credit score will go down, and it will leave a mark on your credit history. If you apply for a type of unsecured loan such as a personal loan, payday loan or credit card in the future, you could be denied due to this. Credit bureaus will report defaulted loans, and it can stay on your credit history for a while. This means your bad credit report will show up during a credit check from a loan company during the loan application process!

What to Do If Your Vehicle is Repossessed

If your vehicle is repossessed after a loan default, you have options. The first is that you may be able to reclaim the vehicle before it is sold by paying off your loan in full. If you aren’t able to do so, the lender is legally able to sell the car without your consent. If the sale settles the debt, you could be entitled to extra money. However, if the sale failed to satisfy the debt, it could mean that you still owe money after vehicle repossession.

Consider All Your Options To Prevent Default on Car Title Loans

When you have defaulted on a title loan, your lender will often reach out to you and inform you that you are delinquent. Delinquent on a loan means that the loan is past the due date, and you have missed a payment in the repayment process. To avoid repossession of your vehicle, there are options you can consider.

Business looking into getting a title loan

Before looking at any options, however, you should first reach out to your title loan lender, and explain any financial hardship you might be having. Most lenders will consider working with you and could offer a new payment plan to help you from losing your vehicle. Communication with your lender is the most important part to prevent yourself from defaulting on a loan after you have become delinquent!

Refinancing your Title Loan

If you are facing default on your title loan, one of your smartest options to consider is refinancing the loan. Refinancing a loan could mean lowering the interest rate, and helping you save money in the long run. Many borrowers will refinance their loan to combat high interest rates, or lower their monthly payment to something more affordable. As a borrower of a title loan, you also have the option to refinance with a different lender.

That’s where Max Cash Title Loans can come in and make your life easier. Through Max Cash Title Loans, you have the option to refinance your existing car title loan through us!

How Do I Apply for a Max Cash Title Loans if I am Worried about Loan Default?

Here at Max Cash Title Loans, we want to do everything we can to help you avoid loan default.3 4  Through Max Cash Title Loans, you can consider the options of refinancing your existing title loan with another lender, and finding a better option for your financial situation. Applying for refinancing is similar to applying for a car title loan! Here’s what you can expect:

  1. Apply to refinance your loan directly online, through our website. Or, contact one of our loan representatives at 855-561-5626
  2. After applying, a loan representative will ask you to submit a few documents to help you get qualified for refinancing. This can take just minutes to do!
  3. Once you have submitted those documents, the last step is to sign your new loan agreement. You might even be able to obtain more funds! 

Stop Your Loan from Defaulting Today

Start the refinancing process today by applying online through Max Cash Title Loans. If you have any questions, our loan agents are available 7 days a week to take your call at 855-561-5626!