Let’s look at what the definition of default is before applying it to what it may mean for your car title loan. Most definitions to the verb of default define it as not meeting the obligation of a deal that had been made. In this case, if you default on a title loan, it means that you are not meeting with the obligations that had been set when you accepted a car title loan with the lender.
But what are those obligations that you have that could make you default on a title loan? Well, when you have a car title loan, most lenders require that you repay the loan over a certain amount every month.
When starting to miss the due dates of the monthly payments, then the penalties could be either late fee charges or other consequences. Some lenders might not even charge for late fees, but it’s always good to know how many times its possible to be late on a payment for a car title loan.
But if missed car title loan payments keep happening without any communication to the lender, the final consequence could eventually result in a default on the title loan. A car title loan default is basically the status labeled when someone fails to repay their car title loan.
As mentioned before, rules regarding a default on a car title loan could vary on several things:
- State you live in
- Lender’s policies
- Lender’s contract
What Could Happen When I Default on a Car Title Loan?
One thing that people might be under the impression of this legally binding deal are the ramifications of a default. If the deal is broken, could you face charges or an arrest? The short answer is no. A default on a car title loan does not give the lender the right to arrest you. You also cannot be prosecuted for a default on a title loan.
The only thing that the lender has the power to do under the contract is to repossess your vehicle. This car repossession must also include a notice. However, take note if a car title loan lending company threatens that you will be imprisoned for getting a default on a title loan, because in most cases, this type of threatening to a borrower could result in the company being sued for violating the Fair Debt Collection Practices Act.
Technically, a lender could take your vehicle at any time without warning if you default on a car title loan, which could possibly mean that they will have to enter your property to repossess the car (once again, this depends on how your state may consider repossession on a vehicle due to a car title loan). Once the lender repossesses the vehicle, they usually take it to a tow site.
Depending on the lender, there is a way to make the consequence of a default on a title loan less severe. In fact, you may be able to get the money that you owe to the lender before they could even repossess the vehicle, but this is only the case after the car title loan has defaulted. Of course, some lenders may even send a notice of repossession to give you that time you need to pay off the loan.
Now that you understand the consequences with a default on a title loan, how do you avoid it? Well for one, you should be sure to ask questions about the default on a title loan with your lender and be sure to always know when that could be possible.
Another way on avoiding a default on a title loan is maybe to avoid title loans that could be demanding more than you have. When searching for title loans there’s a lot of things to look over before you make your decision. This includes:
- Car title loan interest rates
- Hidden Fees
- Policies
- Loan payment details
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 the financial representative 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!
Max Cash Title Loans Wants to Get You a Car Title Loan with Flexible Default Options
What is good to know is that we at Max Cash Title Loans have years of experience in title loans. We understand the stress that could come in not being able to pay a car title loan on time, and we understand that some penalty fees are even incurred for missing payments.
Therefore, as a title loan financial servicer that has helped hundreds of people, we want to help you find options for title loans that work for your financial situation1. With our free services, we offer connections from title loans throughout the country that we match up with the right borrowers, and vice versa1.
With a focus on looking at things like rates and great options for a variety of people4, there’s a chance that we could find the right car title loan for you1. Apply now or call us today to see how we could get you a car title loan that could keep you from getting a default on a title loan.