What You Need to Know About a Car Equity Loan
A car equity loan leverages your vehicle’s value to provide you with fast cash and a flexible financing option. You’ll have to give your lender the title of your vehicle in exchange for the cash, but you can continue using it as you normally would and still have access to all its features. Additionally, you can choose to receive your money the same day you apply, providing a quick solution to financial needs and emergencies.
Unlock Cash with Ease: Explore Car Equity Loan Options
To qualify for a car equity loan, you’ll need to have enough equity built up in your vehicle. This is usually calculated by subtracting the amount you owe on your car from its appraised value as determined by resources like Kelley Blue Book. The more you drive your vehicle and maintain it, the more equity you will build up.
Typically, lenders offer lower credit score requirements than other traditional loans. This can be beneficial for individuals who have poor or bad credit and might not have the best opportunity to find a conventional loan from other sources. Additionally, the fact that an auto equity loan is secured by your car’s value provides some form of collateral allowing lenders to mitigate their risk and offer lower interest rates.
Lenders will also require that you carry full coverage auto insurance. This includes comprehensive and collision insurance, as well as a low deductible. If you fail to make payments, your lender may repossess and sell your vehicle to recover its losses. This is why it is important to carefully consider this type of debt before pursuing it and make sure that you can manage your monthly loan payment.