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What is Title Loan Repossession?
In order to obtain approval for a title loan, you will be asked to pledge a title to a qualifying vehicle as collateral for the loan. A secured title loan offers many benefits, but it is important to consider its potential disadvantages as well.
If you default on your auto title loan, your title lender may decide to repossess your vehicle. Essentially, loan default occurs when you stop making payments on your loan or are in breach of other specified parts of your loan agreement, which means you have failed to comply with key terms of your loan. Most title lenders will try to avoid repossessions, but if you do not keep up with your monthly payments, your vehicle could be seized and sold at auction to cover the remaining balance of your title loan.
If you are having trouble keeping up with your current payment schedule, refinancing your existing title loan could be the solution to your problems! Call 855-422-7412 speak to a LoanMart title loan agent and discuss your options. Keep in mind that your current loan must be in good standing in order to qualify for title loan refinancing!1
What are the Title Loan Repossession Laws?
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Title loan repossession laws and procedures can differ from state to state. The exact timeframe before title loan repossession occurs will depend on your state of residence and the terms of your loan contract. If you are concerned about your vehicle being repossessed in the near future, it is extremely important to communicate with your lender and research the applicable laws and repossession procedures in your state.
If you are currently struggling with your monthly payments, here are some steps you can take to try and prevent a title loan repossession:
- Negotiate with Your Lender: Try negotiating with your loan servicer or lender in order to obtain a new payment plan that better aligns with your current financial situation.
- Refinance your Existing Title Loan: You can try to refinance your existing title loan in order to potentially obtain better terms and avoid loan default! If you qualify for title loan refinancing, you could obtain a new loan with different terms, which should make it easier for you to manage your monthly payments. Consider refinancing with your existing title lender, or try to find a new lender to work with.1
How to Get Your Car Back After Title Loan Repossession?
If you want to get your car back after title loan repossession, you will need to take the appropriate steps to resolve the situation. In most cases, you will be granted the opportunity to get your car back before it is sold at auction by the title lender! However, in order to get your vehicle back, you must make a payment that meets the lender’s criteria or applicable legal criteria to qualify for a reinstatement of your loan. Depending on your state of residence and your prior payment history, a payment equivalent to your current past-due amount may suffice, whereas in some scenarios, you may be required to pay off the remaining balance of your loan plus any applicable fees (storage fees, repossession fees, etc.).
If you don’t have the money upfront to get your car back, here are some ideas to make some extra cash and save your vehicle:
- Get a Part-Time Job: If you are strapped for cash, you may want to consider supplementing your income. A part-time job can be a simple and convenient way to earn some extra money! Home Depot, TJ Maxx, and UPS are just a few stores that are known for hiring seasonal and part-time employees.
- Borrow from Friends and Family: Depending on the amount of money you need to resolve this issue, your close friends or family members may be willing to help you out.
- Sell Unwanted or Unused Household Items: If you’re like most people, you have a number of valuable items around your house that you don’t need or use anymore. So why not hold a garage sale this weekend and turn those items into cash?
You may be tempted to apply for fast loan options like payday loans if you need emergency cash. However, most financial experts strongly advise against applying for payday loans because they are known for trapping vulnerable borrowers into endless cycles of debt. Try to explore all of the options available to you, and make sure to stay in constant communication with your lender or loan servicer. Many lenders will reach out to you and are willing to work with you to resolve the situation!
Financial hardship can happen to anyone at any time. You may have lost your job during the repayment process, and if you are like many Americans who live paycheck to paycheck, job loss can be difficult to prepare for. However, if you are struggling financially and currently have a title loan, it is imperative that you communicate your financial issues with your lender or loan servicer before you default on your loan.
Can a Title Loan Company Take Your Car?
Yes, if you default on your car title loan, a title loan company can legally seize your vehicle and sell it at an auction. Like many Americans, your car is your primary method of transportation, so it may be difficult for you to deal with title loan repossession.
If you want to prevent title loan repossession, you will need to prioritize your monthly loan payments and evaluate your current spending habits. In fact, it may be the perfect time to create a budget and cut out any unnecessary spending!
What Can I Do if My Car is Repossessed by a Title Loan Company?
If your car has already been seized, the first thing you should do is contact your lender or loan servicer directly and get more information about the whereabouts of your vehicle, as well as the outstanding balance of your loan.
If your car is repossessed by a title loan company, don’t panic. In some cases, a title lender may be willing to work with you. If you are able to catch up with your missed payments, you may be able to get your car back and get your loan back on track! The easiest way to get your car back is to pay what you owe and make sure that your loan is current. Try asking your close friends and family for help if you are unable to handle all of your missed payments on your own.
When you are in the middle of a financial emergency, you may not have the emotional or financial aptitude to handle a title loan repossession. If you cannot manage your current payment schedule, you may want to consider refinancing your title loan. Call LoanMart at 855-422-7412 to learn more about refinancing your title loan today! Our title loan agents are available for extended hours throughout the week (except Sundays) to answer your questions.1
Frequently Asked Questions:
What Happens if You do Not Repay a Title Loan and Your Car Is Repossessed?
Lenders have the legal right to repossess your vehicle if you stop making monthly payments on your title loan. Individual terms and conditions around title loan car repossession can vary depending on your state.
What Should You Do During a Title Loan Car Repossession?
Cars are taken to a tow yard during repossession, and you have a certain amount of time to repay before lenders resell them. If your car sells for less than what you owe, you will still owe them. You will get the surplus from the sale if it’s more.
How Can I Prevent My Car From Being Repossessed During an Auto Title Loan?
The most effective way to prevent your car from repossession during a title loan agreement is by paying your fund back on time! You can set up automatic withdrawals from your bank account to prevent missing a title loan payment.
How Do Lenders Avoid Repossessing a Vehicle During a Title Loan Agreement?
Title loan repossession is the last resort that any lender wants to take. If you’re struggling with your payments, contact the lender immediately to explain your circumstances. They may be able to draw up new loan terms.
Does Defaulting on a Loan Affect Your Credit History?
Missing payments with any financial agreement can negatively affect your credit score. If you default on your title loan payments, lenders can report this to the major credit bureaus, impacting your score overall.
