Avoid A Title Loan Default & Repossession
There are many options for borrowing money to pay for unexpected expenses, and one of the most popular ways to get quick cash is with a title pawn. But did you know how easy it is to default on a title loan and that you risk a title loan repossession? This means your lender will take the vehicle after you’ve missed 1 or 2 payments, and they don’t need to inform you beforehand!
Don’t forget about late fees and other charges you are assessed for falling behind. These fees can add up quickly and make it even more challenging to get back to current on the payments. A title loan default is not a pleasant scenario, and you need to take some initiative to prevent this from happening. Let’s lay out the different scenarios that could lead to a default and what you should do if there’s ever a situation where you default on the title loan payments.
What Happens If You Default On A Car Title Loan
Title pawn loans work well when you stay on time with monthly payments and don’t fall behind. Not only to repay the loan but also to preserve your credit history. It’s essential to have a good credit history as it will be a significant factor in lending decisions like a mortgage or low interest loans. Even though online title loans don’t 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 Immediately After I Default
It is easy to think you’ll never face a situation where your vehicle will repossessed. By this, we mean you blow off the obligation or try not to think about it. When you cannot repay a personal loan or have fallen behind in making repayments. But the benefit of a payday or car title loan is that you will not have the bank harassing you to repay the loan or tacking on interest. The priority is to work on a vehicle equity repayment plan to handle the loan payments. A good example is what happens if you work with a company in Orlando, FL, that offers title loans. You may have lower rates, but these lenders are always subject to the various repossession laws of Florida.
Avoid A Title Loan Repossession
Defaulting on a title loan is painful; missing your payments often leads to vehicle repossession. Your lender will take the vehicle and inform you that it’s scheduled to be sold at auction. You’ll have around 30 days to get the car back by catching up on the monthly payments. In some states, you have more time to work with the lender. For instance, you have 45 days to work out a payment plan for California title loans, and the same is true with title loans in AZ. But we all know how hard it is to make the minimum payments, and catching up on late title pawn payments is even more difficult.
If you default on a title pawn, let the lender know immediately and explain how you plan on getting back on track with the payments. Contact them directly, even on weekends or late nights, as most companies are still open and funding title loans after hours or on Sundays. Doing this lets you review your options and devise 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. An online title pawn is convenient but comes with risks as we continue to tell our new clients.
