The short answer is yes! There’s a chance that your vehicle can be taken by your lender if you default on a title loan. However, let’s also dispel the rumor that people might be under the impression of if they were to default on a title loan. FACT: If the deal is broken, you cannot face any type of imprisonment or jail time.
A default on a car title loan doesn’t give a lender the right to have you arrest, and you also cannot be prosecuted for a default on a title loan.
This comes back to the answer of the first question though, which is that the only thing that the lender can do under the contract is to repossess your vehicle. This repossession also includes delivering a notice on the matter. But one thing to take note of is that if a car title loan lending company threatens you with imprisonment for getting a default on a title loan, it could result in the company being sued for violating the Fair Debt Collection Practices Act as it is against the act to threaten a default on a title loan with jail time!
Depending on your car title loan lender, there are ways to avoid a repossession after a default on a title loan. In fact, you could get the money that you owe to the lender before repossession (after the notice on the default had been sent) to keep your car from being taken.
But why is your car being taken from you if you default on a title loan?
Why will my car be taken from me if I default on a title loan?
The car repossession when you default on a car title loan happens because you are using your car’s title as collateral for the car title loan. As a result, your car title loan lender could repossess your vehicle if you default on a title loan, which could possibly mean that they will have to enter your property to repossess the car. Once the lender repossesses the vehicle, they usually take it to a place like a tow site.
Still confused? Well let’s look at what a default it is. According to most definitions on a default, it is typically defined as not meeting the full obligations of a deal that had been made. Therefore, if you were to default on a title loan, you should probably be concerned because it means that you are not meeting with the obligations that had been set by the car title loan.
In case you had forgotten what these title loan obligations are, it is your job to be able to pay your car title loan repayments that are typically done through monthly payments. If you begin to miss these monthly due dates, your minor penalties are typically late payment fees, depending on your lender. On the other hand, some lenders might not charge you with late fees, but it is always a good idea to take tabs on how long before your car title loan can be defaulted due to missing payments.
Of course, continuing to miss car title loan payments without speaking to your lender would then result in a default on your title loan.
But with every car title loan, rules on a default could vary on several things:
- The state that you live in.
- Policies put forth by your car title loan lender.
- The printed documentation on your actual car title loan contract that you had signed.
Speaking of lender contracts, we at Max Cash Title Loans would like to inform you, the borrower, that title loan lenders should notify you about missed payments, especially since most car title loan lenders determine the default on a title loan.
Max Cash Title Loans is here to find you a car title loan that will not default!
Now that you fully understand the real consequences with a default on a title loan, how does one avoid a repossession? The first tip of precaution that you should take is to be sure be informed and ask questions about what could make the default on a title loan happen with your car title loan lender.
One should also avoid title loans that may have high rates or demand more out of your pocket. As a matter of fact, when one is searching for title loans there’s a lot of smaller details to look into before making that final decision:
- Interest rates
- Car title loan’s hidden fees
- Title loan policies regarding defaulting, refinancing, etc
- How the loan payments work
But wouldn’t it be easier to get someone else to do the search for you? Well, we here at Max Cash Title Loans could be that help for you. As a financial servicer, we do all the searching and research on title loans for you. But how does it work? We are happy to explain!
At Max Cash Title Loans, we have years of experience in title loans, and the one thing that we feel you deserve options when it comes to title loans. We wouldn’t want you to default on a title loan that you could not afford, that’s why we look through all our connections to car title loan lenders that we have made from around the country.
Based on your financial situation, we are dedicated in helping you find the right car title loan through a multitude of options. The best part? These services are free, and we do this to provide the best customer service while hopefully getting you some good choices on title loans.
To get started, apply online through our application at Max Cash Title Loans, or call today to see how we can get you a car title loan that could work for you. Just remember: you shouldn’t have to default on a title loan if it’s the right title loan for your financial situation!