Get A Car Collateral Loan
Have you been looking into a car collateral loan, but you're not sure how these loans work and what you need to qualify? Highway Title Loans has offered pre-approval for these secured loans for years, and we can get you processed and approved quickly if you own a newer, lien-free vehicle.
Similar to car title loans, a collateral loan allows you to use the equity from a car or truck as security for a loan. You can borrow $2,500 or more a collateral loan on a paid off vehicle, in some cases upwards of $20,000, and unlike unsecured loans, there are far fewer documents needed underwrite the loan. 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 as collateral.
How Car Collateral Loans Work & How To Get One
Collateral loans are ideal for borrowers who've been turned down for personal loans because of poor credit or limited credit histories. Instead of checking your credit score to see if you qualify, a collateral loan is mostly based on the resale value of your vehicle. The more your car is worth, the more you can borrow. The bottom line is that you can qualify for a collateral loan that starts at $2,500 with any vehicle valued at $6,000 or more. Yes, you'll need to bring in the car or truck for an inspection, but even when you consider the time it takes to submit your paperwork and get the vehicle inspected, it typically only takes a few hours from start to finish to get your cash.
To qualify for a car collateral loan with Highway Title Loans, your vehicle must be paid off, and the title must be in your name. The vehicle should have a resale value of at least $6,000, and you can't have any cosigners or lienholders on the title. You need to show proof of income from your bank or employer, and some companies will want to see valid registration and comprehensive insurance coverage on the vehicle. The title loan value of the car will determine the loan amount, with most lenders offering up to 50-70% of its equity value.
The best part about collateral loans on a vehicle is just how quickly you can get your money. Are you used to waiting days or weeks to get approved and funded by an unsecured lender? Those days are gone when you apply with us. Simply having collateral in the form of a paid-off vehicle is the primary requirement for a loan, and there's a good chance you'll be able to pick up your funds from a local lending location within 24 hours of submitting your initial application.
Why Get A Loan With A Car As Collateral
Why someone would opt for a car collateral loan is often pretty straightforward. Most applicants have already been rejected for payday or bank loans because of their bad FICO scores. Or perhaps they want to borrow more than the few hundred dollars they would get from a personal loan lender. So, instead of an unsecured loan, they use the equity in their car to get cash when other lenders would say no. A car collateral loan allows them to cash out a good percentage of the vehicle's equity, and they can keep driving the vehicle while making payments each month.
Another benefit of car collateral loans is that you don't need to hand over the keys to your vehicle as security for the loan. Whereas with some title loans and title pawns, you need to give up the vehicle, a collateral loan on a car, truck, or SUV allows you to borrow a good percentage of the vehicle's value, and you only need to sign over the pink slip as security for the loan. The process to add a lender as a lienholder is simple, and the title transfer process can be done entirely online in states like California and Florida.
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 loans have lower rates than car title loans with direct deposit, as the equity in a house or condo is far more reliable than what's available from a car or SUV.
Car title loans remain pretty popular, but they're still used far less than home equity loans. These vehicle-secured loans are great if you need to borrow a few hundred dollars, and like a home, you only need to add a lienholder to the title and show proof of income. You can keep driving your vehicle while the payments are made on time. Also, don't forget that boats, RVs, and motorcycles can be used as collateral as well. These are treated differently from auto title loans, as the equity amounts are often smaller(think loan amounts of $2,000 or less, whereas title loans on cars and SUVs can lead to a loan that maxes out at $20,000). While you trade off a smaller loan amount, the processing time is much quicker, and you can sometimes avoid an in-person inspection if you're only looking to borrow $1,000 or less with a collateral loan on a motorcycle, boat, or RV.
Interest Rates With A Car Collateral Loan
Car collateral loans from Highway Title Loans can be a real lifesaver when you need fast cash, but one downside involves the high interest rates. Similar to title loans, a collateral loan on a car comes with interest rates that depend on state regulations and your borrower profile. Some states, like California, have interest rate caps of 36% for most vehicle collateral loans. In contrast, others, like Florida and Tennessee, have no interest rate caps and rely on lender competition to keep rates down. You can expect a very high interest rate in those states, so limit your loan amount to only what's necessary.
Contact Highway Title Loans at 877-433-5454 if you have a high rate on an existing car collateral loan. We'll work to refinance the loan and get you a lower interest rate and payoff term. Are you already in default on the loan, or is it getting to a point where you may not be able to make payments in the future? Why not consider a loan buyout where we find you a lender who will buy out the remaining balance on your initial loan? This option is great if you're in danger of losing your collateral to a repossession, as the initial loan will be paid off and you'll get new payment terms with a car collateral loan that works for you. No matter what your current rate is, apply with us, and we'll work to lower the APR or get you a fresh start with a collateral loan buyout.
Get A Collateral Loan With Highway Title Loans
Highway Title Loans offers collateral loans for anyone with a paid off car, motorcycle, or semi truck. We can get you approved and funded with a local lender in less than one business day, and we're confident you'll get approved if you can verify your income and show proof of a paid-off vehicle. 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 at 877-433-5454.