How to Get Secured Car Loans
Secured car loans require some form of collateral. If for some reason you can't meet your financial obligation, the collateral is sold and the proceeds go toward paying off the loan. Use the following tips get a secured car loan.
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Instructions
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Determine what you'll use as collateral. The most common secured car loan is taken against home equity. If you have a boat or any other valuable property, you can use that. Keep in mind that the higher the collateral's value, the lower your interest rate.
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Check your credit score. Although you're using collateral for your loan, a higher credit score makes it easier to get a lower interest rate. You may want to pay off some of your small debt to get your score up to at least 620.
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Compare loan packages and rates from different lenders. Applying online gives you the opportunity to receive multiple responses. You can then select the package that suits your needs. E-Loan.com allows you to apply for a loan and will match you to a lender according to your credit history.
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Use the new car you're purchasing as collateral. The lender will put a lien on the title until you pay off the loan. If you default, the lender has the right to repossess the car to get his money back.
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Tips & Warnings
For a lower interest rate, make sure your loan amount is less than the collateral's value.
Be aware that if you use your home as collateral and fall behind on your mortgage, you could face foreclosure and lose your home.
