Pledge loans using the car as collateral are a convenient way to obtain a personal loan. Let’s analyze in more detail how to obtain this type of loan and what considerations to take into account.
How do pledge loans work by leaving the car as collateral?
The application of the pledge loans with the car as collateral do not differ much from the personal loans. Basically, they differ in that in order to ensure that the debt is paid in full, the car must be left as collateral for the transaction and is generally a modality used for larger loans. They can also serve as an option for people who do not have a credit history, do not have a fixed monthly income, are unemployed and / or need financing to start.
You will be given the possibility of obtaining a personal loan using your car as a guarantee. The considerations and associated steps to keep in mind are the following:
The guarantee does not mean that the loan will be approved. The approval of the same will depend on the credit policy of the financial institution.
The vehicle will receive inspections to verify its status, that is, a general check will be made to verify that it is in acceptable conditions.
The vehicle will be pledged by the financial company and it will remain in this condition until the end of the loan cycle.
1 – Client completes the loan application with the amount to request, his personal data and those of his vehicle.
2 – The repayment capacity of the loan is analyzed and the application for it is pre-approved or rejected.
3 – A verification is coordinated at the applicant’s address. The same will be done by qualified personnel. The state of the car is a determining factor.
4 – Once the verification is approved, the applicant is contacted to coordinate the documentation signature and insurance change. (In case the insurance is not the same provided by the financial company).
5 – Once the documentation is signed (mutual pledge I will pay) the financial company proceeds to deposit the money in the applicant’s account. The maximum amount for the granting of a pledge loan with cars as collateral will cover a maximum of 40% of the value of the vehicle.