What Happens If I Use My Car As Collateral For A Loan
We often hear from people wondering how car title loans work and what the process is to get cash with their vehicle’s equity. Some applicants are looking for more details about the types of collateral they can use for a secured loan. Others are trying to get info on how much collateral is available in their vehicle. This article will discuss car collateral loans and how they’re similar to title loans!
Can My Car Be Used As Collateral For A Loan – How Does It Work
Yes, the most common type of collateral loan is a title loan meaning you will put up the equity from your vehicle to use in a secured loan. These loans are popular with people who have bad credit and want to base their approval on their vehicle’s worth versus their credit history or other underwriting requirements.
If you use your car as collateral for a loan, the lender has the right to seize your vehicle if you violate the contract terms. If you can’t make your loan payments, the lender can repo your car and sell it to cover the cost of the outstanding loan balance. If the sale of your car doesn’t cover the entire loan balance, you’ll be responsible for paying off the remaining debt. In many cases, you can keep your car and continue making payments, but this isn’t always an option. If you’re considering using your car as collateral for a loan, understand all the risks before signing on the dotted line.
Information & Documents Required For A Collateral Loan
Now that you know more about car collateral loans, you’re probably wondering what information and documents you’ll need to apply. The good news is that the process is pretty straightforward and there’s not much paperwork involved. You’ll need to provide some basic information about yourself and your vehicle. Here’s what you can expect:
Personal Details: When you apply for a collateral loan, you’ll be asked to provide some personal information, such as your name, address, phone number, and date of birth. You may also need to provide your SSN so the underwriter can run a credit check.
Vehicle Information: You’ll also need to provide information about your car’s make, model, and year to see how much it’s worth. The easiest way to do this is to bring in your car so the lender can take a look at it.
Proof of Income: You’ll need proof of income to show that you can afford to make loan payments. This can be pay stubs, tax returns, or bank statements.
What Else Besides A Car Can Be Used As Collateral For A Loan
In addition to your car, a few other types of collateral can be used for a loan. Here are some of the most common:
Home Equity: If you have equity in your home, you may be able to use it as collateral for a loan. This type of loan is called a home equity loan or home equity line of credit (HELOC). For those in
Savings & Investments: Another option is to use savings or investments, such as stocks, bonds, or mutual funds. This is usually only possible with a large amount of money saved up and you’ll need to be comfortable using it is collateral.
Personal Property: In some cases, you may be able to use personal property similar to your vehicle as collateral for a title loan. Common uses besides a vehicle can include a boat, motorcycle, or RV. Anything with a value that can be titled can qualify and be used as collateral for a loan.
Is An Online Title Loan On A Financed Car The Same As Secured Loan?
Yes, whenever you use your car as collateral for a loan, you’re accessing the stored equity as collateral. It doesn’t matter if it’s a car, SUV, or boat. Whatever you use as collateral for a loan the same process and requirements will be in place. The application process is much the same; you will still need to submit an application online or over the phone. From that point, you will be approved based on the vehicle’s worth and then make payments to pay down the amount borrowed. After the financing terms have been settled you can get your car title back.
What Happens If I Use My Vehicle As Collateral For A Loan – Wrapping Up
If you’re considering using your car as collateral for a loan, it’s essential to understand how the process works and the risks involved. Be sure to gather all of the required information and documents before applying for a loan, so you know what to expect. And remember, if you miss any payments, the lender could repo your car, so it’s vital to make an informed decision on whether you want to move forward with a collateral loan and how much cash you need.
Contact Premier Title Loans for any further questions about how to access your car’s collateral and get immediate cash with a standard vehicle equity loan or even a classic car title loan! We work with borrowers all over the country and will get your vehicle equity loan approved in no time!
Jessica has been working in the title loan lending industry since 2012. Before that, she managed a team of customer service representatives for one of the largest payday loan companies in the US. Since coming to Premier Title Loans, she’s overseen our sales and marketing department and looks forward to educating consumers on their different financing options. Jessica is always open to feedback and questions related to short term loans!