What happens if i can't repay the loan?

Facing difficulty in repaying a loan, whether it’s a car title loan or any other type of loan, can be a stressful and challenging situation. If you find yourself in this position, it’s crucial to understand the potential consequences and explore possible solutions to avoid worsening your financial situation. It’s also important to discuss this possibility with a lender, prior to signing a loan agreement.

What Will Happen if I Don’t Make a Title Loan Payment?

Consequences of failing to repay car title loan

When you can’t repay a car title loan, several steps may occur:

Late Payment Fees

Initially, if you miss a payment or make a late payment, the lender may charge you late fees. These fees can vary but are typically added to your outstanding balance, increasing the amount you owe.


If you continue to miss payments, the loan may go into default. At this point, the lender has the legal right to repossess your vehicle as collateral for the loan. Repossession is a serious consequence, as it can lead to the loss of your vehicle, which might be your primary mode of transportation.

Auction and Deficiency Balance

If the lender repossesses your vehicle, it is often sold at auction to recover the outstanding loan balance. If the vehicle is sold for less than the amount you owe (including the loan balance, fees, and auction costs), you could be responsible for the remaining balance, known as a deficiency balance. This means you’re still liable for repaying a significant portion of the loan even after losing the collateral.

If I Don’t Pay Back the Loan Will it Impact My Credit Score?

Defaulting on a car title loan and having your vehicle repossessed can have a severe negative impact on your credit score. A lower credit score can make it challenging to secure credit in the future, impacting your ability to get loans, credit cards, mortgages, and even affecting job opportunities and housing options.

Can I Be Sued If I Don’t Repay An Auto Title Loan?

Yes, a lender can sue you for not paying back a car title loan. When you take out a car title loan, you enter into a legal contract with the lender. This contract outlines the terms and conditions of the loan, including the repayment schedule, interest rate, and consequences for non-payment. If you fail to make payments according to the agreed-upon terms, the lender has the legal right to take action to recover the money you owe.

Here’s what can happen if you don’t repay a car title loan and the lender decides to sue you:

Legal action.

If you default on your car title loan, the lender can initiate legal proceedings against you to collect the outstanding debt. This can involve filing a lawsuit in court.

Notice of lawsuit.

Once the lender files a lawsuit, you will receive a notice of the legal action. This notice informs you of the lender’s intent to sue you for the unpaid debt and outlines the details of the case.

Court process.

If you receive a notice of lawsuit, you will need to respond within a specified timeframe. Failure to respond can result in a default judgment in favor of the lender. If you respond, the case may proceed to court, where both parties present their arguments and evidence.


If the court rules in favor of the lender, a judgment will be issued against you. This judgment legally obligates you to repay the debt as determined by the court.

Enforcement of judgment.

With a judgment in hand, the lender can take further action to collect the debt. This can include wage garnishment, bank account levies, or placing liens on your property, including your vehicle.

The laws regarding car title loans and debt collection vary by state, so the specific legal processes and consequences can differ depending on where you live. Additionally, some states have regulations that aim to protect consumers from overly aggressive debt collection practices and high-interest rates associated with car title loans.

What Should I Do if I Can’t Make a Payment?

If you find yourself in a situation where you’re unable to repay a car title loan, it’s crucial to address the issue as soon as possible. Contacting the lender to discuss your situation and explore possible solutions, such as renegotiating the terms or setting up a repayment plan, can reduce stress and help you devise a plan regarding how and when you can pay off your loan.

Find Out if You Qualify

At Fast Money Car Title Loans, we can connect you with a local reputable lender who can provide a fair car title loan based on the value of your vehicle and other factors. We take great care in vetting the lenders in our network to ensure you work with one that offers you the loan you need, with reasonable terms and payment options.

To learn if you qualify for a car title loan, fill out the form on this page to get started. Our customer service staff will respond promptly to answer any questions and connect you with lenders that can help you secure the loan you need, as quickly as possible.