While securing a car title loans St. Catharines can solve your financial problems, there are consequences that you must be prepared for and know beforehand in case you default in your payment dues.
Effects of Default in Payment of Car Title Loans
In St. Catharines car title loans, you place your vehicle as collateral for your loan. During the loan term, you can still use the car while the title of your vehicle is in the custody of your lenders. Whenever you default in your payment however, the lender can repossess it to compensate for your loan. It is because of this wherein choosing the best lender comes into significance. During default in payment dues, there are lenders who automatically repossess your vehicle without giving you a grace period. On the contrary though, there are as well lending agencies which give you a chance to pay back your dues for a specified allowance period.
1. Your Car Can Be Auctioned By Your Lender
What happens when you fail to pay your loan fees is that your car will be taken by the lenders. The car may then be sold immediately or stored for a while then auctioned for the best bidding price. If your lender will sell the car immediately, it is even possible to find yourself owing them because the purchasing value of your vehicle is below the amount you loaned. What is worst is when you encounter lenders who don’t reimburse you the value of your vehicle even if the selling price was bigger. This is the main reason why it is very significant that you read the terms and policies of your lender especially when it comes to defaulting in payments.
2. Your Car Can Be Repossessed and Stored While You Are Given A Grace Period
Another scenario when you fail to pay your loan is that your vehicle may be taken by the lenders and stored for a while. Then you are given a grace period upon which you must pay your remaining balance. You must also anticipate that you won’t just be paying your balance alone but also car storage fees which the agency has incurred from the moment you defaulted.
3. You May Lose Your Job
To add more insult to the injury, aside from having your car repossessed, you can even end up losing your job. The reason is because it would be difficult for you to get to your workplace without any means of transportation. When this becomes a habit, your employers will have a reasonable ground for firing you.
Based on the above discussions, it is clear that knowing the potential consequences of St. Catharines car title loan payment default is a must. With proper understanding of the risk you will be putting yourself into when securing a car title loan; you will be acting with more tact when dealing with your payment dues. As a result, your vehicle would less likely be repossessed.