Car title loan has become a common household term for many Americans finding themselves in serious financial straits. With simplicity and ease, borrowers can go online or find a storefront car title loan lender to give them up to $5000 overnight based on the worth and equity of their car. While the lender keeps the title or “pink slip” to the vehicle, the borrower is able to continue to drive his car during the duration of their loan.
This type of loan is very attractive to many borrowers because lenders typically do not run a credit check and don’t ask a whole lot of questions to approve the loan. With a steady employment, a bank statement showing direct deposit and minimum income requirements, and a few references, you can apply, be approved and get funded directly into their bank account within few hours. This quick acquisition of funds, is very convenient and timely, can be a hasty decision for many people causing some to completely ignore the reality of their finances and ability to repay the debt.
For people who can afford to take out one of these high-interest loans, this can be used for its intended purpose; to give the borrower with quick money that can be paid back within 30-45days. Unfortunately, there is a high price to pay in interest as these loans are considered a high-riskfor the lender. While the borrower’s car is considered collateral for the loan, the lender is still taking a huge risk he is not being paid back.
So, what happens when the borrower can’t meet up with the payment on their car title loan? This is where it gets bad! Sure, there are lenders that will work with the borrower to come up with a reasonable payment plan but most lenders out there will take drastic measures the moment the borrower doesn’t make good on his payment. The borrower stands a risk of loosing his car when he is not able to meet up with the payment of the loan. This further worsen the financial state of the borrower.
This is sadly, the ugly part of title lending. Even though there are many great car title lenders out there, not all are the same. When opting to take out one of these loans, it is very important that borrower doeshis research on the lenders he intends to use and make sound comparisons. The Internet has made it quite easy to compare lenders, checkup rates, and understand the terms and conditions of car title loans. Going through reviews and stories of those who have prior experience with these kinds of loans is also a great way to find a trusted lender.
Understanding the repercussion of not paying back the loan can save the borrower from unwanted financial crisis as well as the prospect of losing a car all together. Asking “What happens if I can’t make my car title loan payment?” could save you from going through what someone says is the hardest lesson learned.