Auto Pawn Loans - How to Use Your Car As Collateral and Get to Keep it Too3281880
Did you know that you can pawn your car and still drive away in it? An auto pawn loan is a kind of secured debt that utilizes a vehicle title as collateral. If you need a quick loan for an emergency and cannot depend on your credit rating to get 1, an auto pawn loan can assist you get the money you need with out having to give up your vehicle.
How Do Auto Pawn Loans Work? We're all familiar with the way an American pawn shops operates. Pawn brokers lend, the customer, money for a fixed period of time and hold onto a valuable asset that is given up as collateral. Once the cash, plus interest, is repaid, the customer gets the asset back. If you fail to repay your debt, the broker gets to maintain or sell the collateral.
Most pawn transactions use jewelry, electronics, firearms and other little valuable products as collateral, but a vehicle title can also be utilized. In contrast to traditional pawn deals, you can keep and use the vehicle while repaying the loan.
Since, the lender takes a greater risk than a pawn shop, they charge higher interest prices. However, when compared to the exorbitant interest rates charged for unsecured loans, the interest prices for auto title loans appear reasonable.
Most lenders who deal in car equity loans will lend you up to a particular percentage of your vehicle's value to ensure they will make their cash back if you fail to repay the loan. This value ranges from 33% to 50% or greater of the worth of your car.
How to Apply for an Auto Pawn Loan? Applying for vehicle equity loans are simple when you apply on-line. Make sure the lender has a secure web site because you will be submitting sensitive individual info that could be misused for identity theft.
Applying on-line is handy and saves time, but you could make an application by telephone if you are unsure about the security of your personal information. At some point in the procedure of applying for your auto title loan, you will have to speak to the lender to get approval.
As long as you have all the documentation needed, approval can come as quickly as a few minutes and you could have your money in hand in just a few hours. The document you'll require is a clear car title that you have paid off or nearly paid off, which will be retained by the lender as collateral for the loan.
If you own more than one vehicle, an auto equity loan can be a quick and convenient source of cash for emergencies. You can use it to spend off urgent debts, make home and car repairs, pay for medical bill, dental procedures or student costs.
What ever you do with the cash from your auto pawn loan, make sure you have a strategy to repay it diligently. If you default on your debt, it could destroy your credit rating further and make it even tougher for you to get loans from standard lenders.