Before making any decision or accepting any legal advice, you should have a proper legal consultation with a licensed attorney with whom you have an attorney-client privilege. TitleMax offers car and motorcycle title loans and pawns at competitive rates. Unfortunately, both are very negative and will have a serious impact on your credit scores. This doesnt solve the main problem (that youre short on cash), but it can stop the bleeding. Transfer your car loan payments. In some cases, you may be able to work out a deal with your creditor to get behind on your payments without damaging your credit score. This means that if you stop making payments, the lender can take the car back. 35,057. Some states require a lender to notify you about defaults within several weeks, but others allow . On "Smart Money," Sean talks with Nerds across the NerdWallet Content team to answer listeners' personal finance questions. I misspoke earlier. The time by which you must repay the amount borrowed. Refinance your car loan. The lender will then place a lien on your car's title. Experian and the Experian trademarks used herein are trademarks or registered trademarks of Experian and its affiliates. The creditor will resell the vehicle, and youll receive a statement with the details of the sale. You can do this with an unsecured personal loan, a credit card cash advance, help from your family or employer, or refinancing. Many or all of the products featured here are from our partners who compensate us. ", Federal Trade Commission. One way to get out of a car title loan is to pay off the balance as quickly as possible. Get a free bankruptcy evaluation from an independent law firm. Learn more. While Experian Consumer Services uses reasonable efforts to present the most accurate information, all offer information is presented without warranty. Upsolve is a nonprofit tool that helps you file bankruptcy for free. If that's the case, then having a voluntary surrender in your credit history will likely impact you for some time. He is based in Ocean Shores, Washington. Lenders typically charge a monthly fee that can be quite high, which you will have to pay in addition to the original amount borrowed. It is possible that the law may not apply to you and may have changed from the time a post was made. You are still responsible for any remaining payments on the loan. For example, in California, you must submit your title within 30 days of receiving it from the title loan company, pay a transfer fee of $15, and then the DMV will issue you a new title identifying you as the sole owner of the vehicle. About the authors: Sean Pyles is the executive producer and host of NerdWallet's Smart Money podcast. This will allow you to get out of the car loan and other debts. How does a personal loan impact your credit score? How long the voluntary surrender is on your credit report. How to Get a Debt Consolidation Loan with Bad Credit. Should I File for Bankruptcy for Credit Card Debt? This is because it is a black mark on your credit report. A voluntary surrender will stay on your credit report for seven years. If I Surrender My Car, Do I Avoid Repossession? Is a voluntary surrender better than a repo? Titlemax uses a combination of GPS and radio frequency technology (RFID) to keep tabs on our vehicles. If you become unable to pay a car title loan according to the loan agreement, the lender has the right to repossess and sell your vehicle just like a bank would. If You Cant Adjust Your Terms or Refinance What Are the Pros and Cons of Filing Chapter 7 Bankruptcy? Even when things arent dire, you might find that your lender has options available. Especially if your finances are spinning out of control, your lender might prefer to getsomethingfrom you before you become completely insolvent. Many title loan companies will manage the process of reporting the discharge of the loan to the appropriate agency, as well as arranging for you to receive an updated title. You may be able to get a loan worth up to 50% of your car's value. The consequences involved if you are unable to repay the loan. Unfortunately, this extraordinarily high APR is normal for title loans. If youre thinking about refinancing your car loan, here are a few things to keep in mind: -Your credit score will play a key role in determining your interest rate. Check to see whether you qualify for options that would allow you to keep your car, like a repayment plan or more time to make a payment. Ideally, youll want to do this before you fall too far behind on payments. If there is any money left over, the lender will send you a check. 1995 - 2019 TheLaw.com LLC. 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