Car Collateral Loans
A car collateral loan lets people borrow money quickly (sometimes in less than an hour) because they are giving the lender the title to their car. By giving the title of the cat for the lender to hold, if the borrower doesn’t pay, the lender will then keep the car.
This can be a dangerous loan and is usually the last chance loan for a borrower. The reason why this is dangerous is because a car might be a family’s largest asset, and by pledging it for the loan and possibly defaulting on it, they have a chance on losing the car.
This type of loan is also known as a pink slip loan. It’s called a pink slip because in most states the title of the car is on pink paper. When you get this type of loan, you then give the lender the title to hold and probably an extra set of keys. This way if they do have to repossess your car, they can do it fast by just walking up to, getting in and driving a way with it.
A car collateral loan is only available if you own the car or truck free and clear of any debts on it. Lenders only want to loan to car with no debt. The lenders will typically lend you up to half the wholesale value of the car.
The problem with this loan is that while it is so easy to get, the terms of the loan are quite high. Interest rates are very high (but generally lower than a payday loan since you are putting up collateral for the loan) these loans are short term in nature, usually for about 30 days. Some lenders will allow you to extend the loan another 30 days if you are up to date on the interest payment on the car title loan.
If you find yourself in this situation, be very careful with the loan agreement. Make sure you are sure you will be able to make the payments when they are due. If not, you will be losing a very valuable asset to the lender.
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- Car Loans With Bad Credit Today
- How to Get Bad Credit Car Loans
- Bad Credit Car Loans
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- Why Not To Consider Car Loans For Poor Credit
- Where To Find A Bad Credit Car Loan
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