The secured loan is not widely used for fear of loss of well used collateral but is a good credit option due to low interest rates.
Loan is one of the most widely used forms of credit in all its forms (personal loan, overdraft loan, revolving loan, secured loan).
Each with its own particularities and prerequisites for soliciting ends up housing the interest of those who seek a breath in their finances.
Today we will talk a little about the secured vehicle loan, how it works, its advantages and how this form of loan is made by the bank Federal.
Vehicle Guaranteed Loan
When the loan applicant usually owns a car, the type of loan he or she initially looks for is the so-called vehicle loan.
In this way, the vehicle from which it receives the requested amount remains as a means of guaranteeing the debt settlement. Let’s explain further how this type of loan works in practice.
It is popularly known as a refinancing of its bearer vehicle. Since the value released is directly proportional to the market value of the used car as collateral.
For example, if you have a car worth 60 thousand dollars and you are looking for a loan in this mode, the average amount you will get will be 50% of the value of the vehicle, ie 30 thousand dollars. In some cases, depending on the financial institution, it is possible to get up to ninety percent of the value of the secured asset.
Some Important Information About Refinancing Or Vehicle Secured Loan
The first important point that we need to highlight here is the ownership of the vehicle that will be used as collateral. You may only use a vehicle as a guarantee if it is in your name. For married people or children, this form of credit will not be possible.
One of the main advantages of auto loan are the interest rates charged. Usually the cost of this type of loan is well below the value of other types of credit such as personal or payroll deductible loans.
The Step By Step Of Vehicle Guaranteed Loan
Usually this type of loan follows the same roadmap of granting other modalities. The first step after choosing the bank and the initial contact between the borrower and the financial institution comes profile analysis.
Even if you work on the market value of the vehicle it is possible that your profile will be reviewed by the bank to measure the repayment of the loan amount. For this reason, proof of income is usually required for analysis.
After analyzing your profile, a vehicle analysis is made. This assessment takes into account the year of the car, its mileage and its market value.
While lower rates are an inviting pursuit of car-backed lending, this form of lending is often not even considered by people’s fear of losing their car.
However, when well thought out and within your real repayment possibilities as well as for a real reason, the vehicle secured loan can be a real hand in hand, ensuring that you get the money to get that dream off the ground.
The vehicle-backed loan
It is possible to refinance up to 70% of the vehicle
The loan with vehicle guarantee, or the so-called refinancing is called Auto Support. In it the interested person has the possibility to submit the vehicle for analysis and receive up to 70% of the value of the car.
Before you can use auto cash you must go to a branch with all your personal documents and vehicle ownership documents. They currently does not allow this type of request to be made through the internet, taking interested parties to a physical agency.
Import Auto is intended especially for owners of paid motor vehicles seeking extra income for some emergency. The requested amount can be settled within 48 months and is directly deducted from your account.
How does it work?
In order to apply for a loan of up to 70% of the vehicle’s value, the institution asks that the asset to be secured as collateral has a limit of up to two years of manufacture.
If your car has more than two years with a limit of five you can apply for a loan of up to 60%, however, the amount is subject to analysis by itself.
The major advantage of this type of loan made is the fixed interest rates, ie no scares during repayment.
Vehicles not accepted: does not accept rental vehicles, motorcycles, vans and the like, as well as vehicles pending detran.
The not everything is a flower this type of loan also has its disadvantages and the main one is that in case of default the vehicle used as collateral can be sold and with that you lose ownership of the property.
With the sale of the car even if you consider selling it for debt settlement, it cannot be sold until the debt is cleared with the bank.
The financial institution uses this disposal mechanism because it has no guarantees that with the sale of the car you will actually repay the loan.
Despite the advantages of this form of credit (such as low interest rates over other loans) it is worth noting that the process is slower and bureaucratic as the car is inspected, its profile is concomitantly analyzed and only then is the value released by the bank .