Did you know that it is possible to take out a loan by placing a vehicle as collateral? Yes, it is possible! And much more than that: it is very easy to apply for this type of loan.
Perhaps you were even aware of this possibility, but have you ever wondered if it is really worth it? Well, some experts believe so. To learn more, continue reading this content!
Loan placing a vehicle in guarantee: Less interest
Also known as refinancing, the vehicle secured loan is a good solution when we put the percentage of interest charged between this type and other types on the scene.
According to experts, the interest charged when making a loan by placing a vehicle in guarantee varies between 1.50% per month to 2.80% per month. The interest charged, for example, on a personal loan, varies between 4% to 5% per month.
Access to defaulters
Here, each case is different. If the restriction has recently entered, it is possible to make a loan with a vehicle as collateral. It is enough for the defaulter to settle this debt, wait for the write-off and then try to request this loan. Thus, people who have stopped paying a bill for some reason are not excluded from benefiting from this opportunity, as long as it is something recent.
In cases where the default is longer, things get more complicated, making this loan impossible. This is because the credit analysis criteria are basically the same as for any personal loan.
However, it should be noted that the bank, before granting the credit, does an analysis of the customer’s profile, seeking to assess whether or not he is a good payer – based on this, he may reduce the amount requested.
Restrictions and disadvantages
If, on the one hand, this type of loan guarantees some advantages to customers, such as low interest rates , on the other hand, it has some restrictions. One is that, generally, banks do not usually refinance vehicles that are more than 15 years old. This is not so much a disadvantage as a protection policy for the financial institution.
So, if your vehicle was manufactured in 2004 for example, you may not be able to benefit from that opportunity.
Another is that the vehicle can be taken if it does not meet its payment obligations. This is because he is pledged until he finishes the total debt of the loan. That way, if you go through a financial crisis, your situation may become even more complicated.
So it is very important to plan financially. By doing this, you can avoid this type of case and make the most of this opportunity, which stands out when compared to others offered by the market.
Finally, we have another observation. Interest may vary depending on factors such as: year of manufacture and condition of the vehicle. The younger it is, the lower the interest and the opposite is also valid.
Considering this when making a loan by placing a vehicle as collateral can be essential for you to make a conscious and more assertive decision.
However, even if the vehicle is old and in reasonable condition, the interest charged may still not exceed 2.8% per month, which makes this type of loan a great alternative for those looking to save money.
Taking out a loan by placing a vehicle on collateral is really worth it, as we have seen. Not only because it offers low interest rates, but also because it allows some delinquent groups to avail themselves of this benefit.
If you are thinking of taking out a loan by placing the vehicle under warranty, enter our website and contact us! We can facilitate this process and help you achieve your dreams more quickly.