Let's consider the following hypothetical scenario.
You're in the market for a brand spanking new set of wheels (particularly one you can show off to your friends this summer) and – for lack of a better term – hellbent on one model in particular. It has great gas mileage. It has lots of cargo space, making it perfect for when you make the long drive back to campus next September. In short, it epitomizes speed, luxury, and comfort.
But it's also very, very, very expensive. Not too expensive, mind you, but expensive enough to make you balk when you see the price. Since this is hypothetical, you can feel free to use your imagination as to both the car and the price. You realize purchasing a car can strain your wallet to its breaking point. And you're aware of the fact that auto loans can place an even greater strain. What in the world is a college student like yourself to do? You go to Boro, the online financial institution to go for an easy monthly payment plan and a smart way to pay.
More than just affordable, Boro's personal and auto loans are customized to whatever the student's needs may be (car, computer, vacation or otherwise). And as an added bonus for those searching for the best auto loan, your loan can be approved less than two business days after you finish setting up the payment plan. So after filing and completing an auto loan application and getting said application approved, you sign the agreement, make a down payment at the dealership where your dream car is located, pick up the keys and drive off into the proverbial sunset.
You're not done yet, however, as there's the matter of repayment. But as the title of this article states, this post is not about repayment. It's about lien holders and why you should have one. So what is a lien holder?
To answer that, you have to ask yourself the following question: What's a lien?
In layman's terms, the term lien is defined as a right to retain possession of property (car, house, etc.) belonging to another person until such a time when all financial debts owed by that person are paid in full. And a lien holder is someone who legally owns said property until that time.
When you purchase a vehicle using a Boro auto loan, Boro will act as the lien holder and retain the rights to the certificate of title (a document that establishes either an individual or a business as the car's legal owner) until you make your final monthly payment.
So why is having a lien holder important?
Well, it's important because the lien holder will hold (no pun intended) the rights to the title as you amass the amount of money needed for repayment, giving you time to make sure you have the right amount. Keep in mind, however, that having a lien holder can be a curse in addition to being a blessing. Why? Because it protects the holder (in this case, Boro) in the event the buyer (meaning you) default on a payment. Meaning if you either forget or refuse to pay, Boro has the right to put force-placed insurance on the car.
What is force-placed insurance, you may ask?
Simply put, it's a policy that lenders and loan providers place on a piece property when the owners' own insurance lapses and they are unable to find a sufficient replacement. What does that mean for you?
Best case scenario, the holder will act as a third party in the event something were to happen to either you or your car (or both you and your car) and you are unable to deal with insurance. Worst case scenario, the holder will repossess your vehicle and sell it in order to recover the amount originally loaned. And charge you for the cost of the insurance.This is not mean to discourage you and your fellow students from using Boro as a lien holder. This is merely a discussion about what happens when you don't pay.
We hope you consider using Boro as a holder in the event you sign up for a monthly payment plan. Interested in setting up a payment plan? Click here to find out more about our personal loans, here to learn about our auto loans and here to start your application.
