Auto ceramic tile loan lenders have the right to repossess your car should you default on your loan payments. An auto title loan is a short-term personal loan based on the value and equity of your vehicle. Liken it to taking out a second mortgage on your home where the lender looks at {how much|the amount of} your home is worth, {how much|the amount of} you owe, and what the market value makes it worth.
The auto title loan lender looks at the market value of your car ({how much|the amount of} you could realistically sell it for). Any equity the car or truck holds is what determines {how much|the amount of} you can borrow. The difference between borrowing on the equity of your home and the equity of your car is that you don't have to own your home to {get|to obtain} a loan; to {get|to obtain} an auto title loan you must own your car outright. Auto title loans are secured with your car as your collateral unlike {a payday loan|a cash advance} that is not secured by any {type of|kind of|sort of} collateral.
When you {apply for|get|make an application for|obtain|secure} and are granted an auto title loan, the lender will require that you give them the title to your vehicle. This is also called the "pink slip". The reason being is that should you default on your payments for any reason; the lender has the option (and the legal right) to repossess your car. This gives them assurance that they can recuperate their money in the case that you don't repay any, or all of your loan back.
In the {same way|Similarly} you would try to negotiate with an auto lender if you were late on your {car loan|auto loan} payment, you can (and should) attempt to work something out with your title lender. Most lenders don't {want to|wish to} take your car back {any more|anymore} than you {want to|wish to} lose it. Over 2 million people had their car repossessed last year due to auto loan and title loan defaults. No one {wants to|wishes to} lose their means of transportation.
Auto title loan lenders will {set up|establish} automatic withdrawal for your loan payments. That is why they require borrowers to have {a checking account|a bank account} with direct deposit. If you know the {money|the cash} for your loan payment is not going to be in the bank when the lender goes to make a withdrawal, notify them immediately. If your job or income status has changed permanently or drastically make {sure|ensure|make certain|see to it} you tell your lender so they can make new payment arrangements with you. You will most likely {need to|have to|should} "rollover" your loan, meaning you will be extending your payment schedule. Be {aware|Understand|Know}, you will incur extra fees and interest charges but it may be better than racking up bank fees and non-sufficient funds charges when your auto title lender goes to withdraw your payment from your {bank account|checking account|savings account} and it's not there.