To obtain a title loan, a borrower gives the lender his or her car title as collateral. These loans are similar to payday loans, with high interest and short payback periods (usually a month). When they’re thinking of working with title loan companies such as TitleMax, San Diego residents should be aware that if they stop making monthly payments on their loans, their cars will be repossessed, which is a hassle for both parties to deal with.
What Is a Title Loan?
A title loan is often the last resort for most people because of the high interest rates and fees. The time period for these loans is typically about 30 days, and borrowers usually have a few weeks to pay them back. If they can’t, the lenders will sometimes roll over the loans to the next month. On average, lenders roll over title loans eight times. By then, the loans are paid or the cars are repossessed. Lenders may repossess cars after the first missed payment, but many won’t.
The best way to prevent your car from being repossessed is to take out a loan only if you know you can pay it back by the initial due date. Many people take out these loans without having specific plans in place for repayment, and they risk losing their cars. Paying in full can be accomplished with a credit card or line of credit. A friend or family member could help you as well. Another option is to sell your car to pay back the loan, which you can easily do, since a lender will only lend you up to 40 percent of the car’s value.
What Might Cause the Lender to Repossess My Car?
Defaulting on a title loan can be stressful, and repossession can happen without notice. You can walk out to use your car and find it gone. Some lenders will ask for a key to the car and put a GPS tracker on it to make it easier to repossess. Making partial payments won’t prevent repossession. The car can still be repossessed if you aren’t making the full payments. If you can roll over your loan to another month, make a plan to pay it off by the next due date. Each rollover will get more expensive.
How Can I Get My Car Back After It’s Been Repossessed?
There are several ways to get your car back after it’s been repossessed. The first is to pay off the loan amount, repossession charges, and title loan fees. If you can get the money together, you could go to the lender’s auction and try to buy your car back. If you make the highest bid, it’ll be yours again. The last option is to go to the tow yard yourself and pay the fees there. They may lift the 30-day holding period.
If you need a quick, easy way to secure cash and you own a vehicle, getting a car title loan may be the right option if you’re confident you can pay it back on time. For fast, convenient car title loans, San Diego residents rely on the high-quality service from the team at Payless Car Title Loan. To find out how we can help you use your vehicle to secure a short-term loan, give one of our friendly representatives a call today at 619-600-0061.