Tips for Using A Car As Collateral For A Personal Loan
May 10, 2021 | Emma Frost
Thinking about using your car as collateral for a personal loan? It's important to understand all the ins and outs of this beforehand. You need to do all the research you can before applying for any kind of loan. Here are some useful tips to use a car as collateral for a personal loan.
You can use your car as collateral for certain personal loans. If you have a bad or average credit score, this might be the only way that loan lenders are willing to release any money to you. However, there are a few tips and tricks that you should keep in mind before you start applying.
Tips For Using Car As Collateral For Personal Loan
Remember To Look Into Online Title Loans
If you happen to own a car, SUV, or truck and it is fully paid off, one option you have for personal loans is online title loans. With this loan, you could get a lump sum of cash when you use your vehicle’s title as collateral. The great thing is you can keep your vehicle while you are making the repayments of the loan – just make sure to stick to the repayment schedule.
One thing to note is you should never use this kind of loan for frivolous things or as a means to completely eliminate your debt. This isn’t the intended use for this kind of loan. It isn’t for things like vacations, shopping sprees, and so on. This loan is designed to help with – not completely handle – your emergency expenses. If you can handle these expenses on your own, you should not look to these loans. But if you can’t then the loan can help.
Advantages Of Using A Car As Collateral for Personal Loan
It's worth knowing the advantages before securing a personal loan by using your car, van, or truck. Find a few benefits below:
- Collateral always reduces your risk level to lenders. In other words, they know they will get their money back one way or another so they are more inclined to allow you to borrow money.
- Secured loans (i.e., loans with collateral) typically come with longer repayment periods and lower interest rates.
- Some lenders will allow you to borrow more money when you put up your car as collateral.
Know The Difference Between "Car Loan" And "Using Car As Collateral For Personal Loan"
The terms "car loan" and "using your car as collateral" are not different words for the same thing. There are huge differences between the two – no matter how similar they may seem at first glance.
A car loan intends to help you purchase the vehicle. They are typically offered by auto dealerships and garages.
Using your car as collateral for a personal loan, however, means that you already own the vehicle outright and are using this ownership to demonstrate your financial security. You should know this difference before you go for one of these loans.
Make Use Of Your Lien-Free Title For Car Title Loans
Car title loans from us at Fast Auto Loans allow you to use your lien-free vehicle title – in this case, vehicle means trucks, vans, or cars – to borrow anywhere from $300 to $15,000. And, as I said earlier, you can keep using your car while you are paying back the loan.
You don't need to be employed for this kind of loan. However, you must own your car outright and be at least 18 years old. And your title must be in your name and free of outstanding loans or liens.
The loan is easy to apply for and all credit is welcome, including bad credit and even non-existent credit. Start the process of acquiring car title loans by following the steps below:
- Go to our website and fill out the online inquiry form found on the website.
- Wait for one of our local loan representatives to get in touch with you via the phone once you've submitted the form.
- During the call, they will tell you about the rest of the process and answer any questions you have.
- After the phone call, take your vehicle, lien-free title to your vehicle, and your driver's license to the closest Fast Auto Loans Inc storefront or a different pre-determined location.
- Wait while our loan representative examines your paperwork and your vehicle to figure out how much we can offer you.
- If you qualify for approval, you will receive the amount on the same or very next bank business day.
Using car as collateral for a personal loan is a great way to secure financing options like title loans from Fast Auto Loans. It's particularly useful for those who have less-than-average credit scores. So, if you have any questions before you get started, don't be afraid to get in touch. Then, just fill out our online form to use your car as collateral for personal loans.