As you may well know, if you take out a title loan, you will be running the risk of losing your vehicle if you fail to meet the repayments on it. On this page, we want to talk to you a little bit about how title loan repossession works, as well as give you a few ideas on how you can avoid it.
It is important to note that we are taking a very generalized view of title loan repossession here. Your lender or your state may have different rules. However, for the most part, the information that you find on this page is accurate.
Obtaining a Title Loan
One of the perks of taking out a title loan is that often no credit check will need to be carried out. Of course, this does mean that title loan companies will need some sort of ‘guarantee’ that they will get their money back. This guarantee is that you promise to hand over the legal ownership of your vehicle should you fail to meet your repayments. Just about any car could qualify for this type of secured funding, even those with an existing auto loan for salvage title replacement. If you previously obtained a loan to buy and repair a salvage car, you may still qualify for title loans if the car is deemed valuable.
After you have filled in the paperwork for your title loan, you will hand over the pink slip to your vehicle. This will be returned when the loan has been paid off. However, if you fail to make repayments, you run the risk of losing your vehicle. In fact, in theory, a single missed repayment could result in you completely losing ownership of your vehicle.
To make informed decisions about loans and their terms, it’s crucial to compare loans from different lenders. Take the time to evaluate interest rates, repayment terms, and overall costs to ensure you choose the option that best suits your financial situation.
How Long Does a Title Loan Repossession Take?
Technically, the title loan company will be able to seize your vehicle as soon as you miss a payment. In practice, most companies are not going to do this. They will try to work with you to see if some sort of solution can be met. If you cannot agree with a solution, then your vehicle will be taken away. This is likely to happen with a week. After all, the title loan company is going to want to be able to get their money back sooner as opposed to later.
You may be asked to take the vehicle to the title loan company. Here, you will be asked to hand over the keys. They will legally own the vehicle at this point. However, don’t think that avoiding taking your vehicle in will allow you to keep it. If you delay, and once again if you haven’t come to any other solution, then the title loan company will have the right to come to your property and seize what is now their vehicle.
When you sign the contract for your title loan, there will likely be some details about how repossession of the vehicle works in it. Make sure that you read this information. You will likely have the intention of paying the loan back, but it is still worth reading the “small print” just in case the worst comes to the worst.
If the lender has no choice but to take your vehicle away, they will take it to an auction and sell it. This will recoup their losses, and you will have no further financial obligations to them.
What Can Be Done to Avoid Repossession?
This is the thing. Most title loan companies do not want to take away your vehicle. It takes a ridiculous amount of time just to be able to seize the vehicle, let alone put it up for auction. This means that they will try to avoid doing that unless they have no other choice.
If you feel that you are not able to pay back your title loan on time, or you are having other financial issues, then you must talk to the lender. Tell them about your situation. The vast majority of the time, they will be able to work with you to try and come up with a solution. This may mean increasing the length of your title loan, and subsequently increasing the amount of cash you need to pay back, or reducing your monthly repayments for a short time to allow you to get back on track.
Honestly, as long as you deal with a reputable lender, then you are in safe hands. We know that a lot of title companies have received quite a reputation over the years for their ‘hard’ approach to repossession, but this is not the case for most lenders.
Most companies know what it can be like to miss a repayment on a loan. They do deal with people looking to borrow cash daily, after all.
We are not promising that the title loan company will be able to help you out. They do not have any sort of obligation to help you out (in most states), but it never hurts to ask. As long as you are not coming to them every single month, telling them that you can’t afford to pay the money you owe, then they should be pretty fine with everything. The only time they are going to try and take your vehicle away is if they genuinely believe that this is the only method that they have available to them to cover any of their losses.
We would never recommend that you take out a loan to cover a title loan repayment. After all, you will now have two loans that you have to deal with. Some people may ask their friends and family for a bit of assistance, and you can do this. That is the preferred method if you are unable to meet your repayments. However, do know that if that doesn’t work for you, help is available if you go directly to the lender.
Remember, always try your best to meet repayments. As long as you do this, dealing with your title loan is going to be a whole lot easier. Make it a priority each month. After all, you probably do not want to lose your vehicle, right?
