Did you know that Americans currently owe $1 trillion on their vehicles? And the average car loan is $26,162.
If you are one of the lucky few who have paid off their car loans (or who paid cash for their cars, good for you!), then you have some equity built up on your car and you can use that to your advantage by getting an auto equity loan or auto title loan.
Haven’t heard of these loans before? Read on to find out more about them and how you can get one to cover emergencies and other tough financial situations.
What Is an Auto Equity Loan?
An auto equity loan is when a lender will give you a loan based on the equity that’s built up on your vehicle or the value of the vehicle. For example, if you have a vehicle that’s worth $50,000 and you have paid it off in full, the equity in this vehicle is $50,000 and you would be able to borrow up to $50,000 in an auto equity loan.
On the other hand, if you have a vehicle that’s worth $50,000 and you’ve only paid $30,000 of it, then the equity built up here is $30,000 and you would only be able to borrow that much.
What Is an Auto Title Loan?
Even though both auto equity loans and auto title loans are loans you receive based on the equity built up in your vehicle, auto title loans are a bit riskier, as you have to give your title to the lender as collateral. You also need to have paid up the full value of the car before you can get an auto title loan (not so with an auto equity loan).
Is It a Good Idea to Get These Loans?
Both the loans mentioned above are secured loans, and your vehicle is used as standing collateral. This is crucial to remember because if you default on these loans (or miss a payment or more), you could end up getting your car repossessed.
Also, most lenders only offer 2-3 year payment terms (which is quite short), so you need to look at auto equity loans and auto title loans as absolutely the last resort when you are in a financial bind.
If you are going to default on other bills or loans, and you know that you can comfortably pay back the auto equity loan, then go for it. Otherwise, try to borrow money from a friend or family member instead.
Do you already have an auto title loan that you are having a hard time paying off? Get Title Loanser to buy out your title loan and get that much-needed cash fast.
Get a Grasp on Your Finances by Getting a Title Loan
If you are floundering with your finances, and know that a fresh infusion of cash will get you over that hump, then get an auto equity loan. Don’t go into it lightly though. You don’t want to lose your vehicle in the process.
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