Seeing your car repossessed by your lenders for the reason of default payments can be daunting. This is what you don’t want to happen to your car especially because it might be the only valuable possession you have. However, you cannot let go of the possibility of delaying in payments which put your vehicle on the risk of repossession. Out of desperate thinking, you then start to wonder the possibility of removing the collateral from your car title loan. Is that even possible?
Can Car Title Loans Have No Collateral?
The answer is negative. Clarington car title loans are called as they are because they deal will car as collaterals for the loan. The gist with this type of collateral loan is to have a borrower make his owned and cleared vehicle collateral for a loan. The collateral must be of clean title and be fully-paid before a borrower can loan cash. The value of the cash in turn will depend upon the value of the car.
The Reason Why Collateral And Car Title Loans Are Inseparable
The main reason why lending agencies of car title loans make cars as collaterals for cash loans is because they are dealing with some risky borrowers. Borrowers of Clarington car title loans are usually those who can find no other means for quick cash either because of their poor credit ratings or because they are still newbies to borrowing cash. This type of borrowers has very high potential for defaulting in payments. To make the business of car title loans work and still move on despite such risk involved, car title lenders incorporated repossession of vehicles in case of delayed and unreasonable default in payments.
Possibility Of Repossession Should Not Scare You
But there is still something you can do to prevent repossession of your car. This is by negotiating properly with your lender. As a matter of fact, lenders hate the hassle of repossession. Most of them would try as much as they can to avoid repossessing a borrower’s vehicle because they would rather want the borrower to pay off the loan rather than giving the company another task – selling the reposed vehicle.
Why Lenders Hate Repossession As Much As You Do
Repossession cannot instantly solve a defaulted loan. Once a car is repossessed, lenders still have to plan a place for auction, a price for the car and advertising strategies to many bidders just so the car will be sold. The problem is most bidders know that lenders would take any value of the vehicle just to cover the loan, so as a result, the car will sell less – even not enough to cover the entire amount of the loan defaulted.
So, if you are afraid of losing your car in the process of obtaining Clarington car title loans, don’t be. Hidden fact is that would less likely happen since lenders are as much afraid of repossession as you are.