Right to Cure
What is the right to cure on a car loan?
A right to cure is a state-law right to bring a defaulted auto loan current by paying the past-due amount and fees, rather than the full balance, and keep the vehicle or get it back before it is sold. It is not a federal right and it does not exist in every state. With about 1.73 million vehicles repossessed in 2024, the rules where you live are worth checking.
Key takeaways
- A right to cure lets a borrower pay the overdue amount plus allowable fees and restore the loan, instead of paying the entire remaining balance.
- It comes from state law, not federal law, and it does not exist in every state.
- Where it exists, the details vary: what triggers it, what notice the lender must send, how many times it can be used, and how long you have to act.
- Whether it applies before repossession, after repossession but before the sale, or both, also depends on the state.
- Curing is different from redemption, which means paying the full amount owed plus costs to get the vehicle back.
What is a right to cure?
A right to cure is the right to fix a default by paying what is past due — the missed payments plus allowable late charges — instead of paying off the whole loan.
It matters because the default itself usually accelerates the debt. Once a loan is in default, the lender's position is typically that the entire remaining balance is due, not just the payments you missed. A cure right, where one exists, lets you step back from that: you pay the arrears, the loan is restored, and the contract continues on its original terms.
Some cure rights apply before the lender takes the car. Others apply after repossession but before the vehicle is sold. Which one you have, if any, depends on where you live.
Does it exist everywhere?
No. This is the single most important thing to know about it.
A right to cure is created by state law, and states differ — some provide one, some do not, and among those that do, the mechanics are not the same. There is no federal right to cure an auto loan, and no single national rule about notice or timing. Anyone telling you that you always get a set number of days to catch up is describing one state's law, or none.
Your loan contract is a second source. Some contracts grant reinstatement rights that state law does not require. Read the contract as well as the statute, because the two are independent and you get the benefit of both.
Cure, reinstate, redeem
Three different things that get used interchangeably and are not the same.
| What you pay | What you get | Where it comes from | |
|---|---|---|---|
| Cure | The past-due amount plus allowable fees | The default is undone and the loan continues | State law, where it exists |
| Reinstate | Arrears plus repossession and storage costs | The vehicle back, loan continues on original terms | State law and/or your contract |
| Redeem | The full amount owed plus costs | The vehicle back, free of the loan | In most states, secured-transactions law, before the sale |
Redemption is the most widely available of the three and the least useful, because paying the entire balance in cash is not a realistic option for most people in this situation. Cure and reinstatement are the ones that change outcomes, and they are the ones that vary.
How to find out what applies to you
Start with the paperwork the lender sends. In states with cure or reinstatement requirements, the lender generally has to send a written notice explaining the right, what you owe to exercise it, and by when. That notice is the practical answer to the question, and it is specific to your loan rather than to a general article.
If you have not received one, or you do not understand it, three free options exist: a local legal aid organization, your state attorney general's consumer protection office, and the state agency that regulates consumer lending. Any of them can tell you whether your state provides a cure right and what it requires.
If you do get a cure or reinstatement notice, treat the deadline on it as real and act early. Lenders are generally not obligated to extend it, and once the vehicle is sold the option is gone and what remains is a deficiency balance.
What curing does not do
It does not erase the missed payments from your credit report. Late payments that were already reported stay reported, and a repossession that already happened stays on the file even if you get the car back.
It also does not reduce what you owe. A cure restores the loan; it does not forgive anything. If the payment was unaffordable before the default, it will be unaffordable after the cure, and curing a loan you cannot carry usually buys a few months rather than a solution. That is worth being honest with yourself about before you spend savings on it.
Related reading: voluntary surrender and what happens to the balance after a repossession.
Sources
- What happens if my car is repossessed? — Consumer Financial Protection Bureau