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We'd rather not discuss repossessions, as they're typically a lender's last resort if someone can no longer pay their title loan. However, repossessions do happen, and there are steps you can take to avoid getting yourself into a situation where a lender can take your car.
The best way to stop a car title loan repossession is to communicate and work with your lender once you realize you're in danger of falling behind on the loan. Explain to them exactly what's happening and why you can't make the monthly payment. Yes, this conversation may be difficult, and your lender may not be receptive on the first try. However, you need to stay persistent and try to work out a repayment plan with them. Any payment relief or loan restructuring is better than facing a vehicle repo.
Working with your lender to avoid a vehicle repossession is the same strategy you would take if you fell behind on any other conventional loan, such as a car loan or home loan. Believe it or not, finance companies don’t want to initiate a repossession as the entire process is costly and it takes a while to sell your vehicle to pay down the loan balance. The same is true when they need to foreclose on your house or take your car if you fall behind on the monthly car payments. When a lender repossesses your vehicle, they must spend a lot of money for storage and a repo agency to confiscate the vehicle. All these costs add up and they prefer a borrower to continue making monthly payments.
Know When Your Lender Is Going To Repossess Your Vehicle
There may be a situation where you're so far behind on your payments that a title loan repossession is inevitable. The first step is to explain your financial situation to your lender and let them know you're willing to do whatever's necessary to avoid losing your vehicle.
Most borrowers are surprised to learn that a lender will work with them to arrange alternative payments to avoid defaulting on an auto title loan. Any legitimate lender wouldn't want to deal with selling a vehicle at auction. They would much prefer to keep having you make the monthly payments, and they should be amenable to any payment arrangements. Keep in mind your monthly payments go towards a mix of the principal debt and interest charges, and with interest rates on a title loan of over 30%, that's where a lender makes most of their money.
One option to consider is asking your lender to hold on to the car for a short amount of time and not sell it at auction! There's no risk in reaching out; perhaps your lender will be receptive to working with you on a repayment plan. Preparing a vehicle for auction can take 30 to 60 days, and nothing happens until the car is sold. Once the vehicle is sold at auction, there's little you can do but stay in contact and offer alternatives to avoid having your lender sell the vehicle.
You need the vehicle to get to work, and the last thing anyone wants to deal with is the threat of a repo. You’ll lose your mind with the number of incredible fees they charge to do these things and the mistake (which is common) you can make by not reading the fine print they slip into the loan papers.
Stop Your Title Loan Repossession
Have you done all you can, and your lender still won't budge and offer a repayment term? Have you already defaulted on the payments and see no hope of getting back on track? In this scenario, looking for a company to refinance your title loan makes sense. Even if your current lender doesn't renegotiate the terms, other title loan companies may buy the loan and reduce the APR.
Another option is to contact an attorney and see if they can do anything to avoid a repossession. In some cases, you may not have been given enough time to avoid defaulting on the loan, and some states require a lender to serve you with official notification that your vehicle will be repossessed.
Don't Wait For A Title Loan Repossession
Don't wait around for your vehicle to be repossessed, as doing nothing will lead to your vehicle being taken by your lender in a matter of weeks. Check with your state repossession laws and determine your legal protections. Some municipalities like Los Angeles and San Francisco have city restrictions that limit what a lender can do when trying to repo your vehicle. Companies that offer car title loans in Irvine, CA, must follow the state repossession guidelines.
In the long run, repossession can cost you time and money and hurt your credit. Stay in contact with your lender to avoid losing your vehicle, and contact Hyperlend to see how we can help! We can help to refinance your payment terms with a lower interest rate, and in some scenarios, we can arrange a title loan buyout where you avoid a repossession and get a fresh start with new payoff terms.
Call Hyperlend at 800-971-3022 to learn how we can help you avoid repossession!