Tag Archives: COLLATERAL

What happens if you used your automobile as collateral and it was totaled?

Q: I took out a loan with One Main Financial with my automobile as collateral. They take the payment out of my account once a month. All payments have been on time. I was driving my vehicle and the axle broke. I had to have it towed. The shop says it’s totaled whole bottom rusted out. My Insurance Company said they can’t do anything because I was not in an accident. I called One Main. They are asking if my husband can co-sign. I said no way. What can One Main do to me? They are getting their payments every month on time. (Pittsburgh, PA)

A: Take your loan agreement to a lawyer for review. Until you do, neither you nor your husband should sign anything. Do not make any statements to them. The loan agreement will state what rights One Main may have. I would imagine you are obligated to pay the money regardless of the car as collateral. If they are getting paid, and your insurance company will not pay out any proceeds for them to go after, I don’t know what recourse they have.

Can I co-sign for daughter’s car loan if I live in Vegas?

Q: My daughter is 22 and just graduated college in Pittsburgh with honors. She has no student debt and a 6-figure per year job in the entertainment industry in Pittsburgh. She is a union member. Unfortunately, she has no credit history. This loan is from her own bank (PNC) where she has a good amount of savings (over $10,000). First, they told her she qualified, and told her the loan was denied. I offered to co-sign and spoke to the person. An hour later my daughter called and said they won’t allow an out of state co-signor, even though I said I would travel to Pittsburgh and offered whatever documentation they needed. My FICO score is excellent. It really pisses me off.

A:  If I could speculate as to a reason, it would be that if there is a default on the loan, you will be hard to sue as an out of state resident with no real estate in PA that could be used as collateral. I would try another lender. Locally, try First Commonwealth Bank, or, more on the nationwide level, all the usual suspects as there are hundreds of them.