Does The Lender Take Your Vehicle With An Auto Collateral Loan?
A common question people ask when applying for a vehicle auto collateral loan is: Do I get to keep my car? The short answer is yes, in most cases, you can continue driving your car while repaying the loan. But it's important to know how these loans work and how they’re different from a standard title loan.
What Is a Vehicle Auto Collateral Loan?
A vehicle auto collateral loan lets you use your car as collateral to borrow money. This includes options like a car title loan or an auto equity loan. These loans can help when you need fast cash and don’t want to sell your vehicle.
The good news? You usually keep your car as long as you make your payments on time.
Can You Drive Your Car With a Title Loan?
Your vehicle will be used as collateral if you get approved for an auto equity loan or a title loan. The good thing is you will be allowed to continue driving your car, after being approved for the loan. But the lender may take your vehicle if you fail to repay the loan.
Note: Some lenders may require you to install a GPS tracker to monitor the vehicle’s location, just in case you stop making payments.
Title Loan vs. Auto Collateral Loan: What’s the Difference?
Many people confuse title loans and auto equity loans. While both let you borrow using your car, here’s the key difference:
- A title loan usually requires a lien-free title, meaning your car must be fully paid off.
- An auto equity loan lets you borrow even if you're still making payments, based on the equity in your car.
Example: If your car is worth $12,000 and you owe $5,000, you may borrow up to $7,000 through an equity loan.
What’s the Downside of a Vehicle Auto Collateral Loan?
Though equity loans might seem like a great option for those who do not yet own their car outright, it is not always the case. In fact, you can quite easily lose a small fortune. When you get an equity loan, you automatically add an additional sum to any amount that you already owe.
As it might take you a year or even longer to pay off the loan, you may, in the worst-case scenario, end up owing more than what the vehicle is currently worth, simply because cars tend to depreciate in value over time. So, you might actually lose money by taking out such a loan, in case you attempt to trade in or sell the vehicle.
Tip: Make sure the loan amount and repayment terms are manageable before you apply.
Why Choose Delaware Title Loans, Inc.?
Looking for a trusted title loan provider in Delaware? Here's why many people choose us:
- Fast approval with no store visit required
- Keep your car while repaying your loan
- Borrow up to $15,000 based on your vehicle's value
- Apply online or by phone, your choice
Plus, we welcome all types of credit, including bad credit or no credit.
How To Apply for a Title Loan Online
Applying for a Delaware title loan is quick and simple:
- Fill out our online form or call to start
- Speak with a loan rep about your vehicle and title
- Get approved and drive away with your car and cash
What Items Will I Need?
You will need only a few things to apply for a title loan from Delaware Title Loans, Inc.:
- A state-issued ID
- Your lien-free title to your vehicle
- The vehicle itself for inspection
That’s it! Once approved, you could have your money as soon as the same day.
Can I Qualify with Non-Existent Credit?
Bad or non-existent credit should not prevent you from applying for a title loan. The company welcomes all types of credit. And if you get approved, you may end up getting up to $15,000 despite your poor credit score.
Apply For Easy Title Loans Today!
Before deciding to apply for an auto collateral loan, you have to find out exactly what type of loan is offered by the lender. Car title loans are, perhaps, the most popular loans that use your vehicle as collateral. Their main benefit is that they offer fast cash that you can use to take care of an emergency.
If you decide to take out a loan from Delaware Title Loans, Inc., you will also get to keep your car and you might get the money you need without even paying a visit to the store! Call or fill out an inquiry form to get started right now.
Apply online today or call us to speak with a friendly loan rep.
Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.
Mason Roberts is a seasoned economics writer and blogger with a knack for breaking down and simply communicating the ever-changing world of finance. He is philosophically committed to the premise that financial knowledge equals financial freedom.
