What happens if you don’t pay a title loan back?

Quick Answer If you don't pay back your title loan, the lender can take possession of your vehicle. They may also charge you additional fees and report your delinquency to credit agencies. In extreme cases, they may take legal action to recover their money.

Jack Woerner profile picture
Jack Woerner Answer updated on Jun 14, 2023

Fact checked by Dwayne Dumesle

If you default on your title loan, your lender can repossess your vehicle (i.e., you can lose your ride 🚨).

So, let's talk. Let's have a Scared Straight-moment, people. 😨 Yes, your lender can repossess your vehicle. It's part of the whole title-loan-thing, if you will.

Learn: Can you be arrested for not paying a title loan?

But, the bad news doesn't end there. There are consequences that stem from the repossession. This includes additional fees, a hit on your credit score, and possible litigation in extreme circumstances. Let me explain...

  • The lender could charge you additional fees. If you miss a payment or make a partial payment, the lender can charge you late fees, interest fees, and other penalties. These fees can add up quickly and increase the amount you owe.
  • The lender can report your delinquency to credit agencies. Although title loans do not require a credit check, they can still affect your credit score if you default on them. The lender can report your missed payments or repossession to the major credit bureaus, which can lower your score and damage your credit history.
  • The lender can even sue you for the remaining balance of your loan if the repo sale of your vehicle does not cover it. If they obtain a court judgment against you, they can garnish your wages, bank accounts, or other assets to collect their money.[1]

Not paying back your title loan can have serious and lasting consequences. It is important to pay back your title loan on time and in full.

Learn: Can I get a second title loan?

If you find yourself in a financial pickle, reach out to your lender and explain the situation. They might be able to work out a deal with you, like a new payment plan or a little extra time. They won't bite if you call them, but they may if you ghost them. 👻

If you are considering a title loan, find a reputable lender that offers loans on car titles and only borrow what you can reasonably pay back!

  1. Vehicle Repossession ↩︎

profile avatar

My experience with Sound Financial has been absolutely incredible. I got the quick cash I needed without any hassles. The entire process was simple and transparent.