What happens if you put down a car for collateral on a person loan and it breaks down?
I’m going to call my loan office tomorrow but to ease my mind first, I figured I would ask Reddit. I put down my car as a collateral for a personal loan a year ago, it was a small loan only 5k. I have another car already, one I’m paying off. So it’s genuinely not a problem that my collateral car broke down financially. I’m cool with that, and I’ve paid every loan payment on time as I will continue to do so. I’m not looking for my debt to be wiped or sell the collateral car. I’m just wondering what I do now and what the consequences will be.
My plan is to just keep the car parked at my house, turn in the tags, and cancel my insurance. I’ll obviously also call the loan office and let them tomorrow.
Is that enough? I’m still paying on my other car so I doubt I can use that, I don’t own anything else that I can change it out for, will I now have to owe the entire balance?
Location: Louisiana