Car Title Loan Repossession Guide

A guide to stop title loan repossession

Cars and other vehicles help you with a lot of everyday activities. From taking kids to school to going to work, it is almost impossible to do without your car.

The repossession of your vehicle when you take loans against your car title can affect your lifestyle and inconvenience you in several ways. However, before car title loan lenders take your car, they create a flexible loan repayment plan to ensure you are not overwhelmed.

Below, we help you understand how you can save your car from repossession.

What Happens During a Car Title Loan Repossession?

One of the critical principles of auto title loans is that you must make monthly payments on time. If the company does not receive repayment, they may have it in their rules to repossess your car. The repossession law differs from state to state, while many lenders have different regulations. However, it would help if you always discussed your payment plan with your lender.

After a lending company repossesses your car, they take it to a tow yard. This should not worry you because an electric fence surrounds the tow yard, and your car is secure. Therefore, if you are worried about your vehicle, it is safe and can neither be harmed nor stolen.

If your car is towed, contact your title lender and ask why. You should be candid and explain your financial situation, which made you unable to repay the loan. Most title loan lenders are flexible, and they can give you other options that could be available.

If the current payment plan gives you problems, get a loan to refinance. The advantage of a loan refinance is that you can negotiate for better rates and payment terms. Getting more money on your auto title loan is possible under the new terms. A title loan refinance will get you some money, and you can avoid repossession of your vehicle.

What Can Borrowers Do to Stop a title loan repossession?

Running after the title loan repo man
Source

If you want to avoid a title loan repossession, ensure that you make the loan repayments and clear up your account balance. Most lenders send your information to debt collectors who will call you and send e-mails to you until you respond.

When the debt collectors call you, they want you to show the ability to repay the loan and clear your name from the list.

If you get behind your loan repayments, your name gets on the list again, and the same process is repeated. After taking a loan and you realize that you have a problem making repayments, contact your lender. Communication with your lender shows that you will make payments to avoid a title loan repo.

These are the things you should do to avoid a title loan repo.

  • Borrow with a payment plan: Borrowing money is not a problem. However, it is better if your borrow loan amounts that you can easily repay without your car being possessed. Alternatively, always take an auto title loan when you have a payment plan. Then, if you are smart, you will avoid title pawns and lenders who are only concerned about their profits.
  • Consistent Communication: Call your lender and explain if your financial situation is not improving. Then, you can negotiate flexible repayment terms to help you pay off your loan. For example, if you may not have the funds to pay the loan in three months, you can request a 90-day extension that will allow you to repay the loan. However, avoid keeping silent because the lender can quickly repossess and auction your car.
  • Repay the loan amount: Repaying the loan amount and getting out are among the options. You can seek money from friends or sell some household stuff such as jewelry and repay the loan.

When Does a Title Loan Repossession Take Place?

When you take out car title loans, the company assigns their name on your car title. If you fail to repay the loan, they can easily take your car as soon as you miss the initial payment.

However, before the title loan repo occurs, the title loan lender calls you multiple times. If you fail to respond, the lender authorizes the car title loan company to seize your car.

Car repossession is difficult for loan lenders and borrowers because of the work involved. Lenders want to avoid repossession, they must go through your documents and put in extra work until they get your car and tow it.

The borrower works to avoid the repossession while the company tries its best to repossess the car, auction it and recover their money.

What conditions do title loan lenders set to avoid title loan repo?

Car title loans ensure you get finances that make your life easy. Their business is not to repossess your cars. Instead, loan lenders have set the following conditions that benefit the borrower.

No early payments fees or balloon payments

A balloon payment refers to extra charges the borrower must pay after completing the loan. Some companies demand early payment fees, which can cause inconvenience to your plans. Always look for lenders without these charges.

Convenient terms

Before signing for the loan, ensure that you discuss the payment terms and rates. Please negotiate with your title loan company to ensure that your monthly installments are spread well and are affordable.

Convenient Rates

Check the interest rate as you look for companies. Some lenders have exceptionally high-interest rates since they are concerned about getting their money within the shortest time possible. Therefore, getting a lender with the most competitive pocket-friendly rates is wise.

What Do You Do When Your Car Has Been Repossessed?

After defaulting on loan repayment, the lender may not alert you that they are taking your car.

First, if you default on the loan, you should know that your belongings in the car are at risk. If you have valuable items in the car, take them out and keep them in your home.

Call the lender and the car repossession company when you find your car has been taken. You will get the opportunity to repay your loan payment in addition to any interest accrued due to the default on the loan repayment plan.

What Happens After a Title Loan Repossession?

It would help if you did not allow your car to stay in the yard for too long. After some time, the title loan company will have to auction your vehicle, and the highest bidder will buy it. If the price of the car matches the loan amount, then you are on the safe side, and you would not need to make any additional payments.

However, if the car’s selling price is lower than the amount of loan that you owe the lender, you will have to make additional payments to clear the loan. This experience can be debilitating, so you must stay vigilant with your payments.

How Can You Stop the Repo Man From Taking Your Car?

You can seek legal help to get out of the car title loan and get your car back. You can get time to negotiate with your lender and work on your financial and credit reputation. You can seek the services of a consumer or debt relief attorney.

Getting the best attorney to help you with the case is better.

However, if you have previously defaulted on other auto title loans, then the lawyer may not be of much help.

Attorneys can help you with the following:

  • Prove that the seizure was wrongful: If you have the money, pay it upfront and call the car repossession company to return your car. If you repay the loan, you will not need a lawyer’s assistance.
  • Raise a defense to a deficiency judgment: State law determines your redemption rights before a sale, how and when the lender can sell your vehicle, and whether you can be pursued in court for any loan balance left over after the sale. If the borrower needs to avoid the deficiency judgment and eliminate the process of making extra payments, the attorney can present a defense to the decision.
  •  Prove you were in the military: If you are in the military and your car is repossessed, you are on the safe side since the Military Lending Act protects you. In such circumstances, the attorney can show that the lender took your car without a court order.

Conclusion

Despite your best effort, you may be unable to pay your lender according to your agreement. When this happens, your car may be repossessed. However, communicating consistently with your lender can help you avoid getting a title loan repossession.

If you feel that your finances are not getting better, check out the blog for additional information on Proximity Directory. Make sure that you contact your lender and negotiate for some leniency. Finally, you can apply for a title loan refinance. A title loan refinance helps you get better repayment terms and rates, and you can continue making your payments according to plan.

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