What Happens After A Car Title Loan Default
There are many options when it comes to borrowing money to pay for unexpected expenses and you face a vehicle repossession if you fall behind on a title pawn. You can get a loan from your parents, siblings, or friends. This choice is a safer bet than a bank loan or credit union where interest is added to the principal. Don’t forget about late fees are applied if the money is not paid on time each month. But taking out a payday loan or car title loan is going to bring on more severe penalties than if you simply got a cash advance from someone you know. By now you probably know that an online title loan is where you hand over the pink slip for your vehicle as collateral for the loan. With this funding method, you can borrow a lot of money and the creditor will often look past bad credit problems and other financial issues.
Contact your lender to avoid a title loan default
These types of loans work out well when you stay on time with monthly payments and don’t fall behind. Unfortunately, we know that’s always not going to happen and there will be times when a financial emergency comes up. In a situation like this, it’s clear to see why a borrower defaults on a short term loan. After any type of default, you will need to act quickly. Not only to repay the loan but to also preserve your credit history. It’s important to have a good credit history as it will be a large factor in lending decisions like a mortgage or low interest loans. Even though online title loans aren’t going to require a perfect credit score, most creditors will still report a repossession or past due payments to the credit bureaus.
Will My Vehicle Be Repossessed After A Title Loan Default
It is easy to fall into a trap where you bury your head in the sand. By this we mean you blow off the obligation or try not to think about it. When you cannot repay a personal loan or you have fallen behind in making repayments. But the benefit of a payday loan or car title loan is that you will not have the bank harassing you to repay the loan or tacking on interest. The first priority is to work on a vehicle equity repayment plan to handle the loan payments. A good example of this is what happens if you work with a title loan company in Orlando, FL. You may have lower rates, but the lender is still subject to the state laws of Florida!
Even if you and the lender took the time to draw up a personal loan agreement there will be late fees. You both signed the agreement, but that does not mean to say that the terms of the online repayment cannot be altered. If you have suffered a severe financial setback, such as the loss of your job or an emergency came up that has depleted you of your savings. Speak to your family member and let them know exactly what has happened with the pawn situation. You cannot expect them to write off the title loan. Don’t expect an online lender to be sympathetic to your cause if they are unaware of the change in your personal circumstances.
Stick To Your Monthly Payments To Avoid Defaulting On Your Title Loan
Defaulting on a car title loan is just as serious as defaulting on an online bank loan. The borrower should avoid falling into the trap of viewing a personal loan as a casual financial arrangement. This type of borrowing has serious consequences for delinquency. Family members who lend out money are entitled to get their money back, whether they need the money or not. The same is true with a title pawn company that repossesses your vehicle because you miss a payment. Most online title loan lenders that let you pawn a vehicle will want to make sure you can afford the monthly payment before they give you cash. You want to work with a lender that puts your interests first.
If you default on a car title pawn, let the online lender know right away and explain what happened and what you plan to do to get back on track. Don’t hesitate to contact them immediately even if it’s the weekend or late at night as most companies are still open and funding title loans after hours or on Sundays. By doing this you can go over your options and come up with an alternative arrangement. Do not assume that the car title loan will be written off. Try to set up a repayment plan that reflects your changes in circumstances. Even though you pawned your vehicle there are payment options available. Make every effort to at least pay the loan until the balance has been paid off. Once the loan has been paid off your pink slip will be sent back to you. Try to learn from the experience and work to keep the trust of lenders and your family or friends. An online title pawn is convenient, but it comes with risks as we continue to tell our new clients.