What Are The Best Loans Using Car As Collateral?
If you’re planning on using your car as collateral, we here at Utah Title Loans, Inc. are a lender that can help you with that. We offer convenient car title loans that allow you to receive emergency cash in the shortest timeframe if you are qualified.
Though a car can also be used as collateral when taking out an auto equity loan, such loans have a few important downsides that we’re going to talk about in more detail below.
Can You Use Your Car As Collateral For A Loan?
You can certainly use your vehicle to receive the best loans using car as collateral. In fact, qualifying for a secured loan is considered to be easier than getting approved for a loan that is not backed by collateral.
The lender would be able to repossess the asset if you fail to repay. That’s exactly why such loans are less risky for the lender. You might get qualified even if your credit is less than perfect.
There are two main types of loans to get the best loans using car as collateral. These loans allow you to use your car as “payment”. And though the terms ‘auto equity loan’ and ‘title loan’ are sometimes used interchangeably, they are very different in many ways.
Auto Equity Loan
Auto equity loans allow you to borrow money against the value of your vehicle. It is a loan that you can apply for even if you do not own your car outright. For example, if the vehicle is worth $14,000, and you still owe $6,000, you will be allowed to borrow against your vehicle's value.
An auto equity loan is generally a long-term loan, which means that it can last from several months to a couple of years. Each lender has its own requirements and conditions. Some might agree to give you 125% of the vehicle’s equity.
Car Title Loan
With a car title loan, your vehicle gets put up as collateral and you give the lender your cars title in exchange for the loan. In order to qualify, your title would have to be lien-free. You cannot apply for a title loan if you don’t own your car outright.
If you have already paid off your vehicle, you might be able to get anywhere between 25% and 50% of the car's value. Unlike auto equity loans, title loans are short-term loans and would typically have to be repaid within a month.
Is A Title Loan Better Than An Auto Equity Loan?
Though an auto equity loan might sound like an amazing option for individuals who are still making payments on their original car loan, it’s not always like that. Such a loan is a long-term one, so you would have to consider car depreciation. Within the first year, cars typically lose up to 20% of their value – and then around 15% more each year.
With an auto equity loan, you would have to make payments on the car and the equity loan while the actual value of the vehicle stays decreasing. Unfortunately, some individuals end up paying off more than what they would be able to make if they were to sell the vehicle.
With a title loan, you’ll be able to avoid such an unpleasant situation as your vehicle is already paid off. Furthermore, the loan is a short-term one, which means that your car won’t lose a considerable percentage of its value while you’re repaying the loan.
Why Get A Title Loan From Utah Title Loans, Inc.?
As we said, we here at Utah Title Loans, Inc. are a reputable company that works to provide you with competitive title loan offers. You can get up to $15,000 in title loan cash and you will be able to keep driving your vehicle while paying off the loan.
Perhaps the best part about doing business with us at Utah Title Loans, Inc. is the fact that you wouldn’t have to drive to one of our stores to get your money. Fill out an online inquiry found on our website and schedule an in-person meeting with a friendly team member at a location of your choice.
Can You Qualify For A Loan With Bad Credit?
The good thing about this loan is you might get approved even with bad credit. You can receive the best loans using car as collateral under any credit situation, so even if you have been turned down by other lenders in the past, you might be able to get your money with us at Utah Title Loans, Inc. quickly.
Apply For A Title Loan Now!
There are a few types of the best loans using car as collateral. If you have your vehicle fully paid off and you own it outright, you might want to consider opting for a title loan offered by Utah Title Loans, Inc. for help
Our main goal is to help you get the cash that you urgently need. That’s why we have made sure that the whole loan process is fast and simple. In fact, if you fill out the inquiry today, you might be able to get your hands on the money the next business day or even the very same day! So fill out the online form now to begin.
Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.