Car collateral loans are much easier to get approved for than most people think, and it doesn’t take long to qualify. It turns out that these loans are quite popular, as it’s become more difficult to get emergency cash unless you have some form of equity or security backing up the loan amount.
Borrowers have turned to collateral loans for decades now, and not just your car or truck can be used when applying for car title loans completely online. Think about how often people tap into their home’s equity to get money, and you’ll realize the potential for a loan using your car’s title.
How Do Car Collateral Loans Work & How To Get One
Collateral loans are great for borrowers who’ve been turned down for personal loans because of a poor credit. Instead if checking your credit car collateral loans use the equity from your vehicle as collateral. This makes it easy to borrow upwards of $15,000, and lenders are on board for fast underwriting because there’s equity or “security” backing the amount they lend out. They know they can turn to this equity if anything goes wrong and you default on the loan obligation.
To qualify for an instant car collateral loan, the vehicle used as security must be fully paid off and have a clear title in the borrower’s name. The loan value of the car will determine how much money can be borrowed, with most lenders offering up to 50-70% of its worth. The funding amount will often be much more than a standard personal loan because your equity fully backs it.
Why Choose A Loan With A Car As Collateral
As for why someone would opt for a car collateral loan, it’s often pretty straightforward. Many applicants have already been rejected for payday loans or bank loans because of their bad FICO score. So instead, they use the equity in their car to secure funding and get emergency cash when it’s an utmost need.
Before getting a car collateral loan, you should research and ensure you fully understand all terms and conditions and thoroughly read through the contract and state laws regarding title collateral loans in your state. Also, make sure only to borrow what you can afford to pay back and always make your payments on time to avoid losing your car or further damaging your credit. Overall, a loan with a car as security can provide quick access to funds for those who otherwise may not qualify for traditional loans. Still, being responsible and familiarizing yourself with the terms before taking out the loan is essential.
Different Types Of Collateral Loans
Essentially any item with value can qualify for a collateral loan. By far, the most popular these days is your home, as millions of people pull cash out of their properties each year as a home equity loan. These types of loans have lower rates than car title loans, as the equity in a house or condo is far more reliable than what’s available from a car or SUV. Other types of collateral loans are less popular, and you will generally get less cash when you pull out equity from jewelry or construction equipment that’s fully owned. Also, don’t forget about boats and RVs. These are treated than auto title loans differently, as the equity amounts are often smaller. Therefore, the funding amount will be less than expected with a vehicle title loan.
How To Get A Collateral Loan Near Me
Highway Title Loans offers collateral loans, car title loans, and pink slip cash advances and we can get you approved and funded with a lender near you in less than one business day. There’s minimal paperwork required when you apply with us and we’ll provide you with a quick lending estimate in less than an hour. Contact us today to learn how much you can borrow with your car’s equity!
Janet Patterson is VP of Marketing Communications for Highway Title Loans and the feature editor of its Lending Blog. Janet has worked in the financial service industry for over a decade, with 7 years of experience in the car title loan industry. She previously managed a customer service team that helped and advised consumers on all their lending related questions and concerns.