If the borrower fails to make car loan EMI payment as per the agreement then the personal will be termed as a defaulter. In such a situation, lender might repossess the car. On the basis of the loan agreement, the lender will send a written default notice and will ask the defaulter to make repayment or face repossession. If the borrower will fail to honor the notice then the car will be repossessed.
The repossessed car is often sold by the lender at an auction to pay off the default loan amount. The lender will advertise the auction details and will also give the details of the same to the customer at default so that they can also see how the auction process is going on.
But your problems will not end after the repossession of the car and once it is sold off at the auction. There could be various disadvantages of default. You can also face the default judgment. The default is the gap between the value of the car at the time lender sells the car and the outstanding loan amount which you owe on the loan.
It will affect your credit report and if it does then you might find it difficult to get the new loan for next 7 years. It might throw you into the bad credit market where the rate of interest on loan is ominously high. However, if the repossessed car is sold off at a high price than the money which is owed by you to the lender, will be reimbursed to you.
The repossessed car is often sold by the lender at an auction to pay off the default loan amount. The lender will advertise the auction details and will also give the details of the same to the customer at default so that they can also see how the auction process is going on.
But your problems will not end after the repossession of the car and once it is sold off at the auction. There could be various disadvantages of default. You can also face the default judgment. The default is the gap between the value of the car at the time lender sells the car and the outstanding loan amount which you owe on the loan.
It will affect your credit report and if it does then you might find it difficult to get the new loan for next 7 years. It might throw you into the bad credit market where the rate of interest on loan is ominously high. However, if the repossessed car is sold off at a high price than the money which is owed by you to the lender, will be reimbursed to you.
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