There are many types of credit on the market and one of them is the vehicle secured loan . The fact is that when choosing, many people are unsure whether it is a good option or not.
With that in mind, we bring here the advantages and disadvantages of vehicle secured loan over other types of credit.
Advantages of Vehicle Guaranteed Loan
The personal credit that the vehicle uses as collateral is also known as vehicle refinancing. It is a type of loan in which the borrower uses his car, motorcycle, etc. as collateral.
As the borrower is offering something as collateral in the event of default, the interest on these loans turns out to be lower. Still, it is worth noting that companies like Moneco may offer similar rates without the warranty. You need to research before closing the deal.
One of the advantages of secured vehicle loan is that it can be taken by those who have dirty name. However, the person will go through a credit analysis, whether or not the loan can be released.
Regarding the loan amount, it is possible to get from 50% to 90% of the value of the vehicle. This percentage varies by financial institution. In addition, it will depend on the year of manufacture of the good. The younger the vehicle, the better rates you can get.
Another facility is that if you are a customer of the bank to which you make this loan, you can make the payment by debit account.
Disadvantages of Secured Loan
In order to be able to apply for a vehicle secured loan the car must be paid off and on your behalf. Even if you are married, for example, you will not be able to apply for a loan using the property that is in your spouse’s name.
In addition, another disadvantage of this type of credit is that its property is alienated and therefore cannot be sold until the debt is repaid.
And remember, even if you are offering a collateral as well, the financial institution is not required to give you credit.
And finally, this mode is more bureaucratic than a conventional personal credit, after all, the vehicle goes through inspection, is alienated and you risk losing the good. Also, many institutions do not accept very old cars, which can mean vehicles 10 years and older.
What happens if I don’t pay?
The vehicle given as loan guarantee is sold and therefore, in case of default, the property can be lost.
What does it take to apply for this type of loan?
- The vehicle must be in good condition and in good working order.
- An asset survey will be conducted to assess its real value as collateral.
- The vehicle must be in the name of the borrower
- It is necessary that the good be totally settled and without another alienation
Documents required to make the loan
You will need ID, CPF, proof of income, proof of address and vehicle document (CRV).
Who offers this type of loan?
Several banks and financial institutions offer this type of vehicle secured loan. Lifetime Bank, Caisa Bank and Gradesco are some of the bank options for making this type of credit request. In addition, for those seeking an online simulation, it is possible to use Creditas a digital platform that acts as a correspondent banking.
Can Negatives Take Car Guaranteed Loan?
This condition will depend on the criteria established by the company that assigns the vehicle warranty credit. It is possible for a particular institution to accept the risk, but not necessarily any credit institution will provide the loan under these conditions.