Getting money from your vehicle is known as an auto equity loan and it is very similar to a home equity loan, but the difference between this is, you use your car as collateral instead of Your house and you get to pay back with interest.
An equity loan is just like every secured loan and it comes with its own risks. Such as, if you can’t pay up your debt on time, or at all, then your lender repossesses the car. As little as this might sound like, going about your daily activities without your car when it played a huge role in your transportation and business would be tiring. And another thing is, your lender can choose to report you to the credit bureaus and this, in turn, can affect your credit.
Therefore, getting an auto equity loan is only advisable when you have no option and have an emergency that needs urgent attendance. Even then, there are a few options which help you get to borrow with your vehicle.
An additional option for auto equity loans is auto loan refinancing and auto title loans. And even these should be considered only for emergencies.
Where to Find Auto Equity Loans?
Auto loans are offered in a lot of places, such as community banks and credit unions as well as private lenders. You can get rates depending on your credit score, Value of your car and credit history. The largest banks in America, however, do not offer these loans but smaller banks tend to.
Other Ways to Borrow Using Your Car?
There are other ways you can borrow using your car and they include:
· Auto title loans
Auto title loans provide you with the cash you most likely need for the title of your car. You can keep driving the car during the period of the payment but once you aren’t able to meet up to the due date for payment, then your lender can repossess the car. This loan type is for everyone, even people with bad to no credit at all.
There are also payday loans which last for 30 days and have a higher interest which is about 30%.
· Auto loan refinancing
Auto loan refinancing is getting another lender to pay for your current debt from your present lender. This could be due to the interest rate and if you cannot meet up with payments for your current loan. Some lenders might offer cash-out auto refinancing loan, and this gives you an opportunity to make more money than what’s left on your original loan. So, when this loan gets paid, it replaces the original debt and you have extra cash left with you. Learn more at https://www.creditkarma.com/personal-loans/i/auto-equity-loan/