Get Cash Fast: How a Loan Against Car Can Help
If you’re facing a financial emergency and need money ASAP, you may be wondering what your options are. You could try to borrow from friends or family, but that’s not always an option. You could also sell some of your possessions or try to pick up extra work, but those solutions aren’t always practical either. A loan against a car, on the other hand, could be just what you need to get the cash you need quickly.
What is a Loan Against Car?
A loan against a car, also known as a car title loan, is a type of secured loan that allows you to borrow money using your car as collateral. The amount you’re able to borrow depends on the value of your car. Generally, the lender will take a percentage of your car’s value and offer that amount as a loan. You can typically borrow up to 50% of your car’s value, although this varies by lender.
How Does a Loan Against Car Work?
Getting a loan against car is a relatively straightforward process. You’ll need to provide the lender with your car’s title, proof of income, and a valid ID. The lender will assess the value of your car to determine how much money you can borrow. Once you’ve accepted the loan terms, the lender will retain the title to your car until the loan is repaid. You’ll still be able to use your car during the loan period, but the lender will have the right to repossess it if you’re unable to make your payments.
Pros and Cons of a Loan Against Car
Before you decide to take out a loan against your car, it’s important to understand the pros and cons of this type of loan.
Pros:
- It’s quick. You can typically get approved for a loan against a car in a matter of hours, which means you can get the cash you need quickly.
- Credit doesn’t matter. Because the loan is secured by your car, most lenders won’t require a credit check. This makes it a good option for people who have poor credit or no credit history.
- Easy eligibility. While eligibility may differ with each lender, many will only require you to have a clean title with no liens or outstanding debts. In many cases, all you need is a car that is in good condition.
Cons:
- High-interest rates. Loans against car often come with very high interest rates. As a result, they can be very expensive over the long term, especially if you can’t pay them back quickly.
- Risk of repossession. If you’re unable to make your payments, the lender can repossess your car, leaving you without transportation.
- Loan repayment terms can be short. Many loans against car have very short repayment terms, ranging from a few weeks to a few months. This means you’ll need to be able to repay the loan quickly, making it difficult for some to make the payments.
How to Know if You’re Eligible for a Loan Against Car
There can be variations in loan against car eligibility requirements depending on the lender. However, there are a few common factors that most lenders will look at when considering your application:
- You must have a clean title. This means that you must fully own your car and it must not have any liens or outstanding debts.
- Your car must be in good condition. Most lenders will require that your car is in good working order and has no major mechanical issues.
- You must have proof of income. You’ll need to provide the lender with proof of income so they can determine if you’ll be able to make the loan repayments.
- You must be over 21 years old. Lenders will only offer loans to adults who are legally able to enter into a contract.
Overall, a loan against a car can be a good option for people who need money quickly and have no other options. However, it’s important to understand the risks that come with these loans and ensure that you can make the repayments before you take out a loan. If you’re considering a loan against a car, always shop around for the best deal and make sure you read all the terms and conditions carefully before signing on the dotted line.
Also Check: Everything You Need to Know About Personal Loans
