For this to happen, you need an Auto equity loan. This loan bears a lot of similarities to a home equity loan. However, in place of using the value of your house, you use the value of your vehicle instead, then when you do, you pay back with interest.
This loan is just like all other secured loan type. It carries its own amount of terms and conditions including risks if you do not may payments on time or at all. The risk it carries is, if you can’t pay your loan, your lender can gain possession of your Car. In cases where your car is a necessity, it could really be difficult for you to go on without one. Another way a lender can get back at you is by hurting your credit scores by reporting you missed payments in due time.
Therefore, we recommend you only opt for this type of loan when you're in an emergency and need the money immediately for a situation that needs you to attend to it urgently. If you would also like to use your car for loans, Other options include auto title loans and auto loan refinancing. These should also be used only in emergency cases.
Where can I get an auto equity loan?
Most credit unions and community banks some offer auto equity loans. Rates for such loans depend on your credit history, credit score & the value of your car.
You can get auto equity loans in different banks in America, such as Citi bank and banks of America. Federal credit unions usually charge a total percentage rate of 18% and might require extra application fees.
You can also get a loan from a lender, not just a credit union or a community bank. Most of these lenders operate online and offer secured loans.
What do I need for an auto equity loan?
To be able to qualify for this type of loan, you do not need a good bad or any form of credit at all. But there are requirements your lender would need in order to approve your application for a loan.
• Your car must be registered in your name. Most times, it doesn't have to be your own car, but it must be registered in your name.
• You should have proof of income.
• You should have car insurance such as comprehensive and collision insurances.
• You should have a bank account, although it's not important for some lenders, most require it.