Car title loans are effectively illegal in Indiana, though out-of-state lenders do try to talk Indiana consumers across state lines to get the loans. This is one area of consumer finance that Indiana has right, because title lenders are merchants of misery. The loans are even worse than payday loans, because when a title loan goes bad, they take your car, and that may mean taking your livelihood. Generally title lenders lend no more than 25% of the value of the vehicle. When you don’t pay, they take the vehicle and resell it.
The article linked here from thetruthaboutcars.com shows that these acutions are anything but fair to the car owner, The lender sells the car as quickly as possible just to get whatever is owed for the loan and repossession. For most of these borrowers, the car is likely the only asset that the person has, and with the repossession sale, even that is gone.
These “auction” sales may be illegal in some cases and may give you the right to a remedy. If you lose your vehicle to a payday lender, talk to a NACA consumer attorney. Find one in your area by going to www.naca.net or www.consumeradvocates.org.