Automobile Equity LoansJames Richards
An automobile equity loan is almost the same as a home equity loan, except that in the case of an automobile equity loan, you use the value of your vehicle in place of your home to obtain a loan which is paid back with interest.
Auto equity loans comes with its own risk just like other secured loans, if you fail to pay back the loan, your lender has the right to repossess your car. If you fail to pay as when due, your lender can also report to the credit bureau and this will not be good for your credit rating.
Hence, considering the risks involved with an auto equity loan, we recommended that you should see it as an option only when you are in an emergency situation and you can’t seem to get help through quick cash or other means. Aside auto equity loans, other ways to borrow money using your car include auto title loans and auto loan refinancing and these options should also be considered only in emergency circumstances.
Auto equity loans can help people who have credit to get emergency financial help. The lenders do not go through the credit history of applicants for auto equity loans. They focus more on the condition and worth of your car as this is what is used as collateral to obtain the loan. Also, they will want to be sure you are employed, or own a business with which you can be able to pay back the loan from your income.
Where Can I Get Auto Equity Loans?
You can get auto equity loans from credit unions and most community banks. The interest rates for automobile equity loans depend on your credit history, credit score, and the value of your car. Banks such as Citibank, Chase, Bank of America, and Wells Fargo do not offer equity loans but other smaller banks do. Aside the application fees, the maximum annual percentage interest rate that can be charged on auto equity loans is 18% according to federal credit unions standard.
You can also qualify for an equity loan from a lender online, all you need to do is to do a few search on the internet and you will find a couple of options that offer equity credit loans. However, you need to do thorough background check ups and read reviews about these lenders so that you do not fall in the wrong hands. You need to consider applying for an equity loan from a lender that is out to serve your best interest.
The two big lenders for auto equity loans are OneMain Financial and Mariner Finance, which offer secured loans below 36% to car owners who have poor credit scores usually below 630.
The process of applying for auto equity loans are also similar to the processes involved in getting other types of loans. You can apply online or visit your lender in person to get the application form. You fill and submit the application and you can get approved in few minutes; usually under an hour and the money is credited into your account as fast as possible.