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Can Car Title Loan Lenders Take Your Car?

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When emergencies arise and the need for immediate finances becomes urgent, you might think about getting a loan if you are not cash-rich at the moment. You might mull over the idea of using your home as a collateral, but there is another valuable item that you can use that’s sitting in your garage: your automobile. Instead of putting at risk the very roof over your head, the safer thing to do is to use your car title to take out a loan. This is an especially wise decision if the loan amount that you need falls within the monetary value assessed off your vehicle.

Quick and Efficient

Car title loans is the preferred choice for many people because the entire process of applying for one is usually very easy: not too many documents, fast processing time, and low priorities for credit checks (which is especially good news for people who are going through rough times). Overall, the experience of taking out a car title loan is virtually painless and free from so many hassles compared to other types of loans (especially bank loans, which usually require truckloads of documents). For as long as you are able to pay off your car title loan within the designated time frame, you 1) will have met your financial emergency with the necessary funds, and 2) can easily get title back.


At the same time, many would-be loan applicants hesitate over getting a car title loan out of fear of having their car taken away by predatory lenders. This is a perfectly valid concern, especially if you rely heavily on your vehicle for your work and daily tasks; this may have customers question whether or not a title loan is a good idea.The question of “Can car title loan lenders take my car away?” is answered with a yes, but only in the very specific situations of not being able to meet the payment deadline on time and not working with the lender to establish a new payment. Auto Title Loan Lenders are not looking to repossess your vehicles, it is only a last case scenario and often, even if you miss a payment they will be more than happy to work with you. The issue of repossession usually occurs if you habitually miss payments and dodge phone calls from the Lender.

Car title loans are usually considered as very fast loans – with as short as just a few months to about a year or two. Keep in mind that for the duration of the loan period, there will be interest rates attached to the overall loan – as well as additional fees when you do not meet your monthly payables.

The loan can escalate if you miss payment after payment, because as time passes the fees are added on top of your balance and can get even bigger over time. In this worst-case scenario, the person who made the loan might end up defaulting on his loan – which means, the lender will then possess his vehicle.

What Happens to Your Car

Once your car becomes repossessed, the lender usually sells it in order to make money off the vehicle. However, there might be a case wherein the actual vehicle sale is lower than the amount you owe the lender – in which case, you will still have to settle the difference.

Should You, Or Shouldn’t You?

Now that you know that there is indeed a chance that your car can be repossessed, should you still consider going for a car title loan given this risk? The answer is still a “yes”. Think of it this way: any loan that you make will have some sort of risk attached to it, so there’s no reason to panic over the possibility (and not an actual reality) of defaulting on your loan and having your car taken away from you. Think of it as a safer alternative to making a gamble on your home. When you lose your car, you can still commute. When you lose your home – well, where will you sleep at night?

There are also options wherein you can ask for extensions on payment periods, or work something out with your lender so you can meet your dues without the sting of an ever-snowballing penalty. You’d be surprised to know that lenders are also very open to discussion like these.

A car title loan is still a good option especially when you need an amount that’s considerably huge but not in the high thousands. If you are gainfully employed and can expect money coming in regularly, then doesn’t that give you a source from where you can meet the monthly payments?

How to Avoid the Worst-Case Scenario

Getting approved for a car title loan does not have to end in you losing your car. There are so many things that you can do to avoid this:

  1. Commit to paying the monthly deadline on time. Prioritize the payments for your loan above everything else. You might even want to set up some sort of bank automation so that when your salary comes in, the amount needed to meet the monthly payment is automatically deducted from the total so you avoid spending it.
  2. Tighten your belt when you can. Meeting the monthly payments can really alter your spending habits for the entire loan duration, so you should become as frugal as possible to ensure that you have the finances for this debt. Stop eating out for a while, avoid shopping for non-essentials, etc. After all, you can get back to life’s little pleasures when you are finally debt-free.
  3. Look for ways to make more money. If you can find the time, look for money making opportunities to do on the side. It can be as simple as taking catering orders for the people who love your baked goodies, selling preloved items online, or offering your graphic design skills for a fee. The amounts you generate can really add up to meet a few payments down the line.
  4. Use windfalls to make advanced payments on your car title loan. You might get a sudden work bonus, an unexpected cash gift from your favorite aunt, or a nice dividend from a recent investment, these windfalls will really come in handy for shortening your payment periods when you make additional payments.
  5. Look for an accountability buddy. If you feel that you might slip, enlist the help of someone who will remind you and support you about your payment responsibilities as well as being your “voice of conscience” that keeps you from making unnecessary and tempting purchases.

Still a Good Option

Just because the possibility of having your car repossessed is ever-present, do not let this deter you from considering a car title loan. After all, you are not applying for a car title loan just because you feel like doing so: you are looking for a way to secure a sizable amount of cash to meet a pressing need. It can be a very important payment for something such as an emergency health concern. The urgency of your situation might necessitate a car title loan, and you will still be glad that the option to avail it is present. Also, most car title loans actually have manageable payment amounts per month when you divide the total amount across the number of months or years that you need to pay for it. If you think you will need to make the monthly payable even smaller, ask about the maximum loan payment period so the monthly totals get even more manageable.

Again, any type of risk is there for someone who is borrowing money. The best advice, apart from following the four suggestions stated above, is to really know what you are getting yourself into – especially the risks and the finer details about interest percentages that you can be subjected to. We cannot stress the fact that getting a car title loan really is a smaller risk compared to other types of loans, and this fact should further bolster your determination to pay it off.

A good lender for a car title loan is not out there to dupe you out of your money. They understand that people have times wherein they will need money and they don’t have the amount they require, so lenders have made a business to meet that need. In fact, a reputable lender will provide all types of support to make the entire process easier, going so far as to even help you with DMV-related concerns in situations like you losing your car title.

For as long as you are determined to pay off your car title loan on time, you will surely be able to get your car title back and drive your vehicle without worrying about whether or not it will be the last time that you get to do so. In no time, you’d be free from your payment commitments and go back to your regular routine!

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