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I Took Out Two Title Loans on the Same Car and Can’t Afford Them

Written by Steve Rhode

Question:

Dear Steve,

I took out a title loan on my car for emergency cash. That loan is at 116% interest. Then a few months later I applied, in person at a different lender, for an installment loan. That loan turned out to be a title loan on the same car. The stupid thing is, I didn’t realize it was labeled as a title loan until much after the fact. I was applying for an installment loan.

I told the girl helping me that I already had a title loan on the car. She somehow managed to set up a second title loan. This one is at 96% interest. Now I have two title loans on the same car, both of which are more than the car is worth. I’m drowning in debt; can’t afford both of these payments, and I can’t refinance because the car is only worth about $1500.

How do I get out of these title loans????????

Linda

Answer:

Dear Linda,

Clearly, you were struggling before you got the first title loan. As you can see borrowing more money to solve financial problems you already can’t afford is not going to work out.

At this point you apparently owe so much on a car you can’t afford to pay off so your logical choices are:

  1. Hand the car back and prepare to be sued or face legal action when the lenders start fighting over the title to the car. I would not be surprised if the first one says you had no right to put the second lien on the vehicle. The second lender may claim they thought there was no other lien.
  2. I would bet you have bigger financial troubles on top of this mess. The fastest way to clear the debts and get a fresh start is through bankruptcy.
  3. Pay the title loans off in full. Which I’m assuming you can’t do.

You can find a good local bankruptcy attorney and have a free discussion about what bankruptcy would mean for you. Bankruptcy is the fastest way to get a fresh start for the least amount of money.

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Bankruptcy is not the end of your financial world. In fact, it is quite the opposite. See Those That File Bankruptcy Do Better Than Those That Don’t.

The bottom line is this is a financial mess that is going to turn into a shit storm when both lenders go to both attempt to repossess your car.

Sincerly,
Steve

You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.





About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

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