“Auto title loan” has become a common household term for many Americans finding themselves in dire financial straits. With simplicity and ease, consumers can go online or find a storefront auto title loan lender to give them up to $5000 overnight based on the value and equity of their car or truck. While the lender holds the title or “pink slip” to the vehicle, the borrower is able to continue to drive their automobile during the duration of their loan.
This type of loan is attractive to many borrowers because lenders typically don’t run a credit check and don’t ask a whole lot of questions. With steady employment, a bank statement showing direct deposit and minimum income requirements, and a few references, borrowers can apply, be approved and get funded directly into their bank account within 24 hours. This quick acquisition of funds, albeit convenient and timely, can be a hasty decision for many people causing some to completely ignore the reality of their finances and ability to pay back the loan.
For those who can afford to take out one of these high-interest loans, this can be used for its intended purpose; to provide the borrower with quick cash that can be paid back within 30 days. Unfortunately, there is a high price to pay in interest as these loans are considered “high-risk” for the lender. While the borrower’s automobile is considered collateral for the loan, the lender is still taking a huge risk in not being paid back.
So what happens when the borrower can’t make the payment on their auto title loan? This is where it gets complicated! Sure, there are lenders that will work with the borrower to come up with a reasonable payment plan but there are those out there who take drastic measures the moment the borrower doesn’t make good on his payment.
Such is the case with an Arizona woman who took out a loan for $1500. According to the women, her payment was supposed to have been automatically withdrawn from her bank account. After several mysteriously failed attempts, the women went to the lender’s office to make good on her payment. She was informed that she now owed $123.00 in late fees. In the process of trying to resolve the situation with the company’s corporate office, the payments were posted but the lender threatened to send her to collections for the late fees.
Two days later, while awaiting a phone call from the corporate office in hopes of straightening things out, she woke up to find her car missing from her driveway. She was now faced with paying thousands of dollars in fees, towing and storage in an effort to retrieve her car. Sadly, she didn’t have the money and lost her car for good.
This is not an isolated situation and is, sadly, the ugly part of title lending. Although there are many good auto title loan lenders out there, not all are the same. When looking to take out one of these loans, it is essential that consumers do their research. The Internet has made it easy to compare lenders, look up rates, and understand the terms and conditions of auto title loans. Reading reviews and stories of those who have prior experience with these types of loans is also a great way to find a trusted lender.
Understanding the consequences of not repaying the loan can save the borrower from unwanted financial problems as well as the prospect of losing a car all together. Asking “What happens if I can’t make my auto title loan payment?” may save you from going through what one woman says is the hardest lesson learned.