Did you know that there are, more or less, 1.8 million consumers that resort to getting title loans every year? Most of the time, people decide to get car title loans when they’re desperate for cash and pressed for time. While it is easier to get a car title loan than any other loan, you’ll find that it’s also harder to get pay it off.
Insurance for Car Title Loan Lenders
To ensure that you don’t drive away with your car or hide it somewhere far, some car title loan lenders request a duplicate bunch of car keys or even go as far as GPS device installation, so they could monitor where you the car is at all times. Another tool that car title loan lenders love to install is a starter interruption system, usually with your money, which automatically voids all actions when you turn your car key in the ignition.
If you fail to pay on or before the due date, car title loan lenders could take ownership of your vehicle. This is the main point of the business, after all. Some lenders will not allow you to lay a finger on your car until payment has been made.
“Rolling Over”
If you fail to pay off your car title loan within the loan period, usually for 30 days, the lender can give you the option to “roll over” your loan. This process means carrying the previous loan over to a new one. However, it will surely cost you more since there will be interests and fees added immediately.
If not handled well and prevented at the very start, this could be the start of a very jeopardous series such as getting a loan, failing to pay, rolling over, and so on and so forth. You could wind up with much more on your plate than you intend to tackle.
In extreme cases, people end up with a loan that’s close to impossible to pay off. In cases like this, you might just let your lender repossess your car to save costs.
Repossession of Your Vehicle
A lender can repossess your vehicle if you decide to default on your car title loan. Once you go default, the lender takes full ownership of your car. He now has the option to either keep it or simply sell it to come up with the money you owe them. They can’t, however, file a case against you for debt. Since repossession laws vary in each state, it is still possible for you to get your vehicle back once you can settle your loan.
Conclusion
People call lenders that offer car title loans the “predatory lenders” because of the way they select their borrowers. They usually look for those with bad credit scores like people who find it hard to apply for loans in top banks. Sadly, these kinds of lenders are not in it for the money. They’re much more interested in your car title, which is collateral.
