Borrowers with bad credit cannot typically qualify for traditional loans from a bank or for a cash advance from a credit card. So when they need cash quickly for an emergency, the often have to rely on unsecured debt instruments with exorbitant interest rates and fees.
But if these borrowers own their car that is fully paid off or nearly paid off they can get an auto equity loan that is secured using their automobile as collateral for the loan. If you're in need of quick cash for an emergency and you have bad credit, typically you cannot qualify for unsecured credit because your credit record makes you a risky investment for lenders.
Unfortunately, you have been unable to demonstrate that you are capable of repaying debts on time. Fortunately, you can now break free from your bad credit and apply for a secured loan. All you need is to own or nearly own your automobile.
With an auto equity loan even if you have bad credit you can still get secured funding using your automobile as collateral. This protects the lender in case you default on your payments. If you fail to make payments according to the repayment schedule that is pre-determined, the collateral, your automobile, will be repossessed in order to cover the debt.
When a debt is secured it usually carries a lower interest rate than unsecured debt. The lower interest rate, auto collateral loans are more appealing. Unsecured debts have extremely high interest rates because they are more risky for lenders.
When a borrower with bad credit offers an automobile to a lender, the risk is offset by the collateral used. To qualify for an auto equity loan, you must own or nearly own the car used as collateral. Most lenders will only lend you up to a certain percentage (usually between 25 percent to 50 percent) of the car's wholesale value.
This protects the lender just in case the borrower defaults on the loan or fail to repay the debt according to the term of the agreement and the lender is forced to repossess and sell the vehicle.
Auto equity loans are helping those with bad credit
In order to rebuild credit, this debt must be paid back strictly according to the payment schedule in the loan agreement. The credit bureaus will be notified of your record of payments. Since these agencies are more focused with your recent credit activity, the act of consistently paying back the loan on time will help you establish a more positive credit history.
If you're looking to apply, contact a reputed lender that offers borrowers flexible repayment options and competitive interest rates. Read the terms of the agreement carefully and find out what payments you need to make and when. Have a plan for making your payments strictly on schedule so that you do not end up losing your car and creating a negative mark on your credit report. An auto equity loan can get you out of a tight spot and, when used wisely and repaid responsibly, can even help you reestablish credit.
fast loan bad credit
Up To $ 1500 Quick Loan Online. No Hassle. Fast Instant Approval. 100% Approval In 1 Hour. No Telecheck. Get Quick Loan Now!
Rating of fast loan bad credit
Get Online Application at online payday loans.