Do you need fast cash but keep getting rejected by lenders?
Every year millions of Americans are hit with unexpected expenses. Medical emergencies, car troubles, urgent home repairs… life happens. And 9 times out of 10 it doesn’t wait for your next paycheck.
There’s a problem
Most borrowers aren’t able to access fast cash when they desperately need it. In fact, Bankrate’s latest report found that 59% of Americans would be unable to cover a $1,000 emergency expense by using their savings account. That’s a huge gap between urgent needs and available funds.
But what if there was an asset you own that could give you a leg up?
Enter vehicle equity.
Vehicle equity is quickly becoming one of the most useful ways borrowers can unlock fast cash. Between a Title Loan and other vehicle-backed emergency loan options, people are tapping into their cars to get the money they need… fast.
Here’s what you should know.
What you’ll pick up here:
- Why Vehicle Equity Matters Right Now
- How Borrowers Can Use Vehicle Equity For Fast Cash
- The Pros and Cons Borrowers Should Know
- Ways to Use Vehicle Equity Wisely
Why Vehicle Equity Matters Right Now
If you own your car outright, your vehicle equity equals 100% of the car’s current market value. If you still owe money on your car, your vehicle equity is the current market value minus what you owe.
But here’s the kicker…
You probably didn’t know that. Most car owners don’t. They purchase a car and use it to get from point A to point B. But if you were to ask a lender, they view your vehicle as potential collateral. That’s what makes vehicle equity such a useful tool if you need fast cash.
Vehicle equity loans have been on the rise in recent years. A report from the Federal Reserve found that 37% of American adults would have a difficult time paying for an emergency $400 expense if they only had cash or their savings to work with. When larger emergencies arise, even fewer people have cash set aside.
Vehicle equity could be the answer.
How Borrowers Can Use Vehicle Equity For Fast Cash
The basic concept here is simple. Borrowers can take out a loan using their vehicle equity as collateral. The lender retains the title to the vehicle until the loan has been repaid, but the borrower can still drive their car.
So why do so many people like it?
Because it’s fast. Unlike bank loans which can take weeks to process, vehicle equity loans are simple. There’s less paperwork. Borrowers typically don’t have to prove their income. And they can receive their funds almost immediately.
Here are a few more reasons:
- Loan approval takes an average of 24 hours or less
- Loan amounts are based on the vehicle’s value
- Credit score doesn’t matter as much
- Borrowers can typically keep driving their car
When you need cash yesterday, those reasons become even more attractive.
Imagine you need an emergency cash loan to pay for an expensive medical bill. Or you need to borrow money to prevent an eviction. Long waits don’t apply when you’re in a bind.
Vehicle equity loans offer quick funding.
The Pros and Cons Borrowers Should Know
It’s never a good idea to borrow money without knowing the pros and cons. That goes for vehicle equity loans too. Before you sign on the dotted line, it pays to know exactly what you’re getting into.
Let’s break it down…
The Pros
If you own your vehicle outright (or close to it) vehicle equity loans can be a fantastic option. Loan amounts are derived from the value of your vehicle. That means if you own a car that’s worth more money… you can qualify for a larger loan.
Other pros include:
- Credit doesn’t have to be perfect
- You can get the money you need quickly
- Flexible terms that can work with your budget
When used correctly, vehicle equity loans give people a chance to access capital they wouldn’t normally qualify for.
The Cons
As with anything in life, there are risks involved. In this scenario, the downside is pretty clear cut. If you fail to repay the loan, the lender can take your car.
To help minimize this risk, borrowers should:
- Borrow only what you need
- Understand all the terms before agreeing to the loan
- Know how you’ll spend the money
- Shop around and compare at least 3 lenders
Vehicle equity is a powerful tool. But like any tool, it can cause damage if you’re not careful.
Ways to Use Vehicle Equity Wisely
Not all vehicle equity loans are created equal. In fact, the difference between a positive experience and a negative one usually comes down to the borrower. By taking the right steps before applying for a loan, you can set yourself up for success.
Here are 4 things every borrower should do:
Know How Much Your Vehicle Is Worth
Understanding exactly how much your vehicle is worth is step 1. Knowing your car’s value can help you shop around for lender offers that are competitive. Plus the more equity you have in your car, the better loan terms you’ll be qualified for.
Shop Around
This tip cannot be stressed enough. Always speak to at least 3 different lenders before settling on a final decision. Every lender is different. By comparison shopping, you may be able to save yourself hundreds of dollars.
Read The Fine Print
Slow down and pay attention to the details. Make sure you understand the interest rate, repayment terms and any penalties for late or missed payments. You don’t want any surprises once the loan kicks off.
Have A Plan To Repay Your Loan
An emergency cash loan should always have an exit plan. Figure out exactly how and when you will repay the loan before you agree to take it out.
The concept is simple, but it will make your life much easier.
Emergency cash loans should never be viewed as a long-term solution. Borrowers who view vehicle equity as a band-aid and have a plan to pay it back quickly tend to have the best outcomes.
The Bottom Line
Vehicle equity loans are a great option for borrowers who need fast cash and have equity built up in their car. These loans can offer simpler requirements, and funding can be available almost immediately.
To quickly recap:
- Your vehicle can be used as cash with equity loans
- They’re faster and simpler than traditional bank loans
- Borrow responsibly and have a repayment plan set in place
- Comparison shop with multiple lenders
- View vehicle equity loans as a short-term solution
When you’re stuck between an emergency and your next paycheck, vehicle equity loans could be the answer you’re looking for.
