A person can receive a car title loan when they use an automobile that they own and have equity in as collateral against a sum of borrowed money. A lender will possess the title to that car and provide a check that must be repaid, along with a fee for lending that money in the first place.
While this is an easy way to quickly receive a check, people need to be conscious of how these types of title loans work and the consequences for failing to repay what they owe.
If a person defaults on their loan, this means that they did not meet all the terms that were outlined in the car title loan. Things that could trigger such a default are that they failed to repay the amount that was borrowed on time; they missed a payment, or did not pay the lender’s fees for loaning the money along with the full sum of the borrowed amount. Defaulting on a car title loan could lead to their car being repossessed.
Car title loans are helpful tools for those who have trouble getting traditional loans from big banks. But there are consequences for failing to repay, which is why it’s important to have a plan for paying back a car title loan.
One easy way to repay a car title loan is by using an IRS tax refund to cover the costs. If a taxpayer borrower anticipates getting a big refund check, they should plan ahead!
Although people may want to spend their IRS tax refund money on something more fun, it is more important to do everything possible to avoid defaulting on a car title loan. If the lender chooses to repossess the car, that person will not only lose their transportation, but will also lose out on the opportunity to sell it or trade it in for a newer automobile in the future.
Using a tax refund check is a smart way for someone to make sure they can repay their car title loan in full and on time. They won’t have to deal with added fees or be responsible for paying repo fees, and they’ll have their title back too!