Car Guarantee Loan Clear Your Doubts And Evaluate The Pros And Cons
The secured car loan can be the salvation for those who have an underused vehicle and have plans to invest or even in case of emergency. Apply For Car Loan
After all, the more payment guarantees a customer presents to the creditor institution, the easier it will be to obtain credit.
On the other hand, this modality has in common with other similar risks if payments are not made.
The inclusion of the debtor’s name in the credit protection registries is just one of them.
Read on to find out how to apply for credit giving your car as collateral, the rules, fees, advantages, and associated risks.
You can only gain by seeking knowledge!
How does a secured car loan work?
A secured car loan is a loan application in which a vehicle in the customer’s name is used as collateral in case of default.
To do so, the bank evaluates the car to know its market value and how much it can represent in terms of margin .
For example: let’s imagine that you have a 2013 Celta that, according to the FIPE table, currently costs something around R$14,000 to R$16,000.
If the vehicle is in perfect condition and without anything that changes its market value (accessories, for example), it will be at this price that the bank will provide credit.
However, it should be noted that the available margin will never be equal to the total value of the car given as a guarantee.
Therefore, it is necessary to consider the percentage offered by the bank, which varies in the range of 50% to 90% of the stipulated price after evaluation.
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Advantages and Disadvantages of Secured Car Loan
Every loan has its risks and, with credit with a car guarantee, this principle does not change.
On the other hand, there are advantages that make it much more attractive, even if compared to property collateral.
Let’s see now what they are?
Starting with the advantages, here’s why it’s a good idea to consider a secured car loan:
The big advantage to be highlighted in the car loan is the interest rates that are considerably lower than the average.
While most of the unsecured credit lines work with interest of up to 12.9% per month, in the loan with a guaranteed car, this percentage drops to around 1.6%.
In this way, those who have a vehicle can take the opportunity to apply for a loan at very friendly interest and, in addition, remain in possession of the property.
Everything will just depend on keeping up with the payments until the last installment.
Now, talking about the disadvantages, understand why this type of hiring can be a trap :
Risk of losing the car
Imagine that, for some reason, you had to spend a large sum and, as a result, became indebted, without being able to pay the loan with a car guarantee.
In this case, the bank, being the owner of the vehicle for the duration of the payments, will have the right to confiscate the vehicle and put it up for auction.
Now, what would happen if this vehicle were, for example, your work tool, as is the case with application drivers?
Not only would you lose an asset, you would be unable to work and continue earning money to pay for the loan.
Of course, this is an extreme situation, but given that many people take credit without planning, you need to put it in the balance before deciding.
Is there a secured car loan for negative people?
Another aspect in which the loan with vehicle guarantee works like the other modalities is in relation to the negative ones.
Although this is a limiting credit condition, there are companies that still approve applications.
It all depends on the financial analysis carried out by the bank, which may or may not accept the risk of granting a loan.
Anyway, having a car to present as a guarantee always counts in favor .
Tips for a secured car loan
With the recent decrease in interest rates, the supply of credit in the Brazilian market is higher than ever.
This is good news.
However, it is at times like this that it is necessary to take extra care not to go into debt.
See what to do to make your car loan a reason only for achievements and joys.
Always follow a plan
You’ve probably seen this tip in some other material you’ve read about loans.
Even though it sounds repetitive, it is necessary to remember that, when it comes to applying for credit, all planning is welcome.
First, because borrowed money doesn’t come for free, and then, you need to prepare for a long period of recurring payments.
The more adjusted your monthly budget is, the less scares you have.
Assess the risks
Nobody applies for credit thinking about not paying, right?
However, you must always be ready for the risk of losing your car if default hits your door.
Therefore, the idea is to place as a guarantee a vehicle that is not essential or that is not used as a work tool.
Use Azulis tools
Another key issue is finding the right finance company . Visit
In that case, don’t just hang around navigating the uncertainties. Search for Azulis, where the best fintech and online credit banks are registered.