More people have been turning to auto title loans recently. These secured loans are a sensible option for individuals with limited finances due to global pandemic. While there are many advantages to this loan, there are risks as well. Defaulting on your car pawn loan Ponoka Alberta could have serious consequences. And since they say forewarned is forearmed, here’s what you could face:
What Happens When You Default on Your Title Loan?
- Higher Penalties: The lending company will impose penalties every time you miss your payment deadline. The amount will depend on where you live. Some states have placed a cap on late penalties or repossession fees while others have given lenders free rein. Your interest rates will also go up if you miss a payment.
- Repossession: Since you pledged your car as collateral, it can be repossessed if you default on your loan. Lending companies have the right to do this to ensure they recoup their investment. However, the particulars on how the collateral will be recovered differ per state. Some have mandates that require lenders to notify when the vehicle will be towed while others let the repo company acquire the car anytime and anywhere.
- Reduced Credit Score: Defaulting on your cash for car loan will also impact your credit score, especially if your car was pulled out. The lender will report this to credit bureaus, and it will remain on your credit history for years. It will also pull down your rating points.
Same Day Cash
Do you need cash fast? Apply with Canadian Equity Loans and get what you need quickly. You can borrow as much as $50,000 without worrying about credit checks. The company also offers low-interest rates and allows early payouts without penalties. Sign up on their website or call their toll-free number at 1-844-586-6311.
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