WILL I GO TO JAIL FOR FALLING BEHIND ON A TITLE LOAN?
It’s not necessarily hard to find affordable title loans these days. There are hundreds of options both locally and online for creditworthy applicants. You simply have to apply with a lender, wait for with a credit decision, and in doing so, you can keep driving your vehicle. It’s simple enough that most applicants can finish an application in 10-2 minutes. Most lenders will ask for your name, government-issued identification card (ID), and proof of your income source. The biggest drawback with online title loans is that most companies will require you to hand over your pink slip as collateral.
The problem is that many people struggle to make payments on their loans. When they first take out an Online title loan everything is good. They have a large sum of cash and they’re able to make the monthly payment on time. The problems start down the road, usually after 3-6 months of making payments. As a result, they end up defaulting on their car title pawn. This results in the question “Will I got to jail for defaulting on a title loan?” This article will answer this question according to the law, but before that, you have to understand more about title loan itself.
Will You Go to Jail if You Default Your Title Loan?
Many people are worried about being treated unfairly by the lender once they default the title loan. It may be happening in some places, but under the law, a lender is not allowed to make threats. Asset takeover by force, physical threats, or anything of similar measure are not allowed. The lender has to avoid running afoul of the state repossession laws.
Most importantly, you cannot be arrested for default on an online title loan. You cannot be prosecuted for not repaying car title loans. The lender only has the power to take possession of your vehicle in a reasonable way. There will also need to be a notice regarding this movement. Take note if a company threatens that you will be jailed. In most cases, they could be sued for violating the Fair Debt Collection Practices Act.
How to Prevent Title Loan Default?
Prior to moving forward with a car title loan, you should check out other financial resources first. It has been an ongoing myth that companies often charge their borrower’s high-interest rates. As a result, many firms have released offers with lower interest rates due to the competitive industry. Nonetheless, there are more dependable options than using your assets as collateral, such as the following:
- Savings Accounts
- Bank Loan or Credit Union
- Family or Friends Assistance
- Credit Card
You could decide which of your options is best by determining the fees, APR, and payment terms. Also, take into consideration of what happens in the worst-case scenario. In this case that would be a repossession.
It is all about careful decision-making before taking that leap for a title loan. Always decide based on what is best for you. When you’ve made the decision be sure to compare collection practices of all the top online title loan companies. It’s important to know what will happen if the worst-case scenario occurs and you default on a title loan!
Learn about these types of loans here: https://www.thebalance.com/car-title-loans-315534