It may come to you as a surprise when we tell you that your car is worth more than just a vehicle that drives you around. It is a source of fast cash that can be used during difficult times. You don’t have to sell it off. Your car is capable of providing the funds you need financially aside from getting you from point A to point B. Your car can get you instant money if you use it as collateral to obtain a loan based on the equity of the car. Read on for more information about our car equity loans.
What is a Car Equity Loan?
A car title loan, as it’s also called, is a financial instrument through which you can get cash whenever you find yourself short of funds. It is a safe and secure loan available to anyone who owns a fully paid for car that is no older than 10 years. To be eligible for this loan, you must have some equity in your car. The loan value will be calculated based on the market value and also the condition of your car.
There are 2 types of Equity a car can have:
Positive Equity – When the current outstanding loan on the car is less than its market value, the vehicle is said to have positive equity.
Negative Equity – When the market value of the car is less than the outstanding loan, then it is a case of negative equity for the vehicle.
So, now that we are through with the positive and negative equity concept of the car, let us understand how the equity loan value is calculated. You can easily get your car evaluated in the market by a car dealership or a trusted online appraisal tool. This value is for your reference only and shouldn’t be considered as the final amount for the car equity loan you want. Once you decide to get a loan , we at Loan Center Canada do a thorough check and assess the value of your car. This amount is more or less similar to the one you get from a dealer or online appraisal tool. A lot of things are considered while evaluating your car. We check the condition of the vehicle along with the important details such as year, make, model and kilometers to name a few. These details play a vital role in the approval and disbursal of the loan.
Now let us say the car is valued at $10,000 in the market. The following three scenarios will help you understand our car title loan properly.
- Scenario 1: The borrower owns a vehicle but has a loan of $3000 left on the vehicle to be paid off. Here, car equity is positive as the market value of $10,000 is more than the loan value of $3000. You’ll be eligible for a car equity loan from us. The loan amount will be adjusted accordingly.
- Scenario 2: The borrower owns a car that is free from all liens and financial obligations. Here also, the equity is positive and the loan amount will be decided after checking the condition of the car. Between 30-40% of the equity stored in the car will be the loan amount lent out.
- Scenario 3: The market value assigned to the car is $10,000 and the car owner has a $11,000 loan amount to pay. Here, the equity is negative. He won’t be eligible for a car collateral loan.
More about Car Equity Loans
Though it may seem easy to get a car equity loan, , it must be noted that the borrower at all costs should try not to default on the monthly installments. This loan works like any other loan and late fees will occur etc. Easily look after immediate expenses such as house repairs, medical expenses, tuition fees etc.with a car equity loan.The process to get a vehicle collateral loan is super easy with a submission of only a few basic documents. The documents required are as follows:
- A fully paid vehicle no older than 10 years
- Clear title to your car
- Proof of legal age as per your province
- Proof of permanent residency
- Proof of vehicle registration and vehicle insurance papers in your name
- A valid Canadian driver’s license
- Spare set of keys to the vehicle
To get your car collateral loan, call (toll free) 1(844) 604-4143 to talk to one of our loan agents or simply apply online.
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