I Feel Like I’ve Paid Enough on This Auto Title Loan


Dear Steve,

March 2019, I took out a car title loan for $5,800. I paid $1,000 towards the principle and approximately $4,395 in interest (5% interest, $293 per month interest. I am a Lyft driver and the interest payment is so high for me that I have only made interest payments. I am at the point of surrendering the vehicle. Even if I had $5,800, to pay off the loan I have already paid them over $5,000 so I would end up paying over $10,000 on a $5,800 loan.

I want to know if I can hire a lawyer to negotiate with the title pawn and ask if they will put the amount I have paid in interest toward the principle and to allow me to simply pay the remaining balance after that?



Dear Delvory,

You are certainly able to attempt to negotiate with them. One place to look for an attorney would be here.

The entire idea of title loans is to get people to put up their vehicle as collateral for a high priced loan.

If you fail to pay the balance of the loan you should look at the contract you signed to see what the consequences are. Typically the lender has the right to take the car, sell it at auction, and go after you for the difference in the auction sale price and the loan balance. But you’d need to talk to an attorney that is licensed in your state to confirm what your law is in your state.

According to a 2016 Consumer Financial Protection Bureau report the title loan lenders are no stranger to defaults.

While 22 percent of title loans default it loans like 8 percent lose their car on their first title loan while 11 percent lose it to repossession by rolling over the title loan.

I can’t stress enough how important it for you to get legal advice from an attorney in your state before you proceed down any specific path based on assumptions.

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