Can I Get Loans Using My Vehicle As Collateral?
The process between a lender and a borrower generally relies on some kind of collateral that the lender can repossess, securing the loan. If you’re interested in a loan, then you might wonder whether you can get a loan using your vehicle as collateral.
You can get a loan using your vehicle as collateral; in fact, the majority of secured loans nowadays are done using a vehicle as collateral.
Car title loans are an option to get up to $15,000 in a secured loan where the lender puts a lien on your vehicle and uses it as collateral. The rest of this article will walk you through how title loans work and whether they’re right for you.
What Is A Title Loan?
Vehicle title loans are a type of loan using a vehicle as collateral. If you need a personal loan but can’t find a good rate or get qualified for various reasons, then secured loans (like a title loan) might be the way to go. In general, you should only rely on vehicle title loans if you’ve exhausted your other financial options.
Secured loans in general require something of value that you own that can be used to repossess if you fail to repay the loan. As such, secured loans are generally more forgiving when it comes to credit and borrowing history, although there are never ‘no credit checks.’ A title loan company might still turn you down based on credit.
Putting up collateral tilts the risk factor of the loan towards you, so lenders tend to be more forgiving and offer lower rates. In order to use your car as collateral, it needs to have some degree of equity in it.
The equity is the value of the vehicle weighed against anything you still owe on it (like your car loan).
You need to have positive equity for loans using a vehicle as collateral, meaning more money in the value of the car than what you owe on it, to be able to apply for an auto title loan. Lenders put a lien against the value of the car and will remove it once your loan is repaid in full.
Of course, you can still use your car normally at this time. Just make sure you adhere to your loan repayment schedule.
When Do You Need An Auto Title Loan?
Using your car as collateral is an option, albeit one that you should think about carefully, that can help you pay for emergency repairs, expenses, or bills.
Vehicle title loans often offer loans up to $15,000, but the amount will vary based on the equity in your vehicle. This is determined by your car’s make, model, age, and repair history, among other things. You might consider a title loan if your credit is poor or nonexistent, or if you’re having trouble getting a personal loan.
Secured loans using a vehicle as collateral come with a degree of risk, so make sure you have an active plan to stick to the repayment schedule. With that being said, due to the collateral involved, secured loans are generally available for a much lower rate.
How Tennessee Title Loans Can Help
If you need money fast, then you might be considering a title loan or type of collateral-based secured loan. Tennessee Title Loans offers a fast and efficient process for you to borrow up to $2,500 with a title loan.
You’ll need a valid I.D., the lien-free title of your vehicle, and the vehicle itself. A representative will look at the vehicle to make sure it’s in good condition and let you know whether you qualify for the loan. If so, then you’ll generally get your money later that day or on the following business day.
Of course, you can keep your vehicle while you apply for loans using a vehicle as collateral, and you are still able to apply even with bad credit. In order to get a title loan, you’ll need to make sure that the vehicle’s title is in your name. If not, you won’t be eligible to apply for a title loan.
To start the process of getting loans using a vehicle as collateral with Tennessee Title Loans, fill out the online form and wait for a representative to contact you. During the call, you can schedule a meeting so that the representative can inspect your car.
Once your I.D., title, and proof of income are verified, the representative will determine if you qualify for approval. If so, you’ll get the money the same day or the next business day.
Get Started Today
If you need cash fast and need to use something as collateral, then consider getting a title loan from Tennessee Title Loans to get the cash you need quickly and securely. You can use your vehicle as collateral and by doing so, it opens the possibility of a loan to those with all types of credit. Fill out our online form to get started today!
Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.