Auto equity loans are good for an emergency financial situation when you urgently need money today and can't qualify for other Personal Loans or Car Title Loans. If you have a car or other vehicle even without a clear title, you can use them as collateral and get a quick online Car Equity Loan the same day even with bad credit.

Auto Equity Loans

Table of Contents:

Why apply for Vehicle Equity Loans?

What is an auto equity loan and how does it work?

An auto equity loan advantages and disadvantages

Auto Equity Loan Requirements

Which credit rating is required to obtain an Auto Equity Loan?

What is the difference between Auto Equity Loans and Vehicle Title Loans?

Is Auto Equity Loan right for me?

Are there alternatives to Auto Equity Loan?

Why apply for Vehicle Equity Loans?

From time to time, everyone faces financial hardships such as medical care, unexpected bills, or home renovations. Unfortunately, any difficulties lead to unforeseen expenses that most people cannot cover. Thus, you will have to look for an additional source of income or ask for help from friends and family. However, some emergencies, such as medical care, need funding quickly, so a loan may be a good option. However, if you have a bad credit history, then traditional lenders may refuse to approve your application. Is there a way out of this situation? Of course, if you have a car, you can get an equity loan.

An auto equity loan uses your car equity as collateral for the loan. Thus, if you have bad credit and need cash quickly, an auto equity loan may be a good option for you. If you have not heard of an equity loan before, you should study the basic information and decide whether this type of loan is right for you or should you look for another option.

Auto Equity Loans for Bad Credit

What is an auto equity loan and how does it work?

An auto equity loan is a secured type of loan that allows you to get quick approval. An auto equity loan is very similar to a home equity loan; however, you need to provide a car as collateral.

The advantage of an auto equity loan is that you do not need to own the car, so even if other lenders use your car as collateral, you can still apply for an auto equity loan. Your maximum loan amount is equal to the market price of the car.

As a rule, an auto equity loan is more expensive than other loans, as it is designed for borrowers with bad credit history or financial problems. Thus, the lender faces some risks of lending to an unreliable borrower and needs additional guarantees such as a higher interest rate on the loan. Also, an auto equity loan will be a good option for people who are in an emergency situation and need quick money. Thus, you have the opportunity to solve your problems as quickly as possible.

An auto equity loan advantages and disadvantages

Before deciding whether to take out a loan or not, it is necessary to weigh the advantages and disadvantages of the proposal. When you know what you are looking for, you can compare it to your finance and decide if you can use that option or should you look for something else. Explore the advantages and disadvantages of an auto equity loan.

Auto equity loan advantages
  • It's easy to get approval for an Auto Equity Loan even with bad credit. Many borrowers are afraid of getting rejected by a traditional lender, as they have a bad credit history, but with an auto equity loan, you do not need to worry about it, since this loan is aimed at people with bad credit. Thus, almost everyone qualifies for this loan.
  • You don't have to own your car. Even if you have not repaid your car loan in full, you can still apply for an auto equity loan and be approved. You can get an Auto Equity Loan with no title or without clear title.
  • You can have two loans at the same time. If your car is already being used as collateral for another loan, you can still get auto equity loan approval.
  • Convenient payment terms. Auto equity loan has long loan repayment terms, so you will have small monthly payments and can easily repay the loan. However, since it will take longer to pay off the debt, you will have to pay additional interest.
 
Disadvantages of an auto equity loan
  • High interest rates. An auto equity loan is an expensive type of financing because lenders take the risk of lending to borrowers with bad credit and want additional guarantees. Thus, you run the risk of getting high interest rates.
  • Possibility to lose your collateral. Since your car is collateral for the loan, it is very important to pay off the debt on time, otherwise, you risk losing your car, which will lead to a lot of problems.
 

Auto Equity Loan Requirements

As you know, in order to qualify for an Auto Equity Loan, you do not need to meet a large number of requirements. The most important advantage is that even a borrower with bad credit can get a loan. However, despite this, there are several other requirements that must be met in order to receive a payment. Review the basic criteria and make sure you are eligible.

  • You must be at least 18 years old and be a US citizen or official resident.
  • You must provide proof of income in order for the lender to be sure that you will repay the loan on time.
  • Comprehensive and collision car insurance. Most auto lenders ask for car insurance in order to make a loan, so make sure your car is insured before applying.
  • You must be the owner of the car title.

The lender may also ask for additional information such as your residential address, contact phone number and email in order to approve your application.

Frequently asked Questions

 
Which credit rating is required to obtain an Auto Equity Loan?
 
What is the difference between Auto Equity Loans and Vehicle Title Loans?
 
Is Auto Equity Loan right for me?
 
Are there alternatives to Auto Equity Loan?