Looking for some fast cash? Not willing to opt for the traditional loans which require considerable time to approve the loan amount? Auto Equity loan can solve your financial problem seamlessly. It is one of the most effective ways to get some fast money with minimal verification of your income and with no credit check at all.
Let me offer you a more clear idea. Auto equity loan is a kind of secured loan that allows the borrower to use title of the vehicle that they own as the collateral. Borrowers who are eligible to get this loan should allow the lender to place a lien on their vehicle title. Moreover, the borrowers in order to secure the loan should hand over the hard copy of the car title to the lender. As you repay the loan, the lien will be removed and you will get back your car title. Now, do you know what a car title is? It is the legal certificate for a car that establishes an individual as the legal owner of the vehicle.
If you fail to make the payment on time, then your lender can repossess your car. They can even sell it out to repay your outstanding debt. These are typically short-term loans and in most cases the interest rate is comparatively lower than unsecured loans. It is also often the most preferred way to get fast cash. Moreover, your credit history will not be considered by the lenders while lending you the money. They will only take into account the condition and value of your vehicle.
How Auto Equity Loans Work?
While offering you the loan, the lending company will evaluate the value of your vehicle on the basis of the wholesale price. They will decide the loan amount based on what they think your vehicle is worth. The lending company will then hold your car title until you repay the loan. You will be given a specific term to repay your loan. If the borrower fails to repay the credit within the stipulated time, you will have to sell your car to the lending company. However, many companies also provide the option to roll over the payment.
However, before entering into any financial agreement with a money lending company, check out what step they are likely to step or the options that the company provides, in case of non-payment or late payment of loan.
When you are obtaining loan against your vehicle, you are putting your car title up in exchange of cash. What is most beneficial about this loan is that you are still the owner of your car, even though the title of the vehicle is on loan. This also applies that you can still use your car during your loan term.
Who can qualify for the loan?
In order to qualify for auto loan for bad credit, car owners should have the vehicle insurance. He should also own the car title completely. If you are still indebted to the bank from where you have taken loan to buy your car and your car title still remains with the bank, you cannot opt for the loan. The money lending company will not allow you to use your car as collateral to secure the loan.
Hope you have learnt some essential facts about auto equity loans in this article. And I’m sure it will help you to decide what type of loan you want for buying a car.