The longer you own your vehicle and continue to make timely car equity loan payments, the more equity you build in it. This equity can be unlocked through an auto equity loan, which allows you to borrow against your vehicle’s value – or its appraised resale price minus the amount of any outstanding loan balances. This type of secured financing can offer a lower rate than an unsecured personal loan or credit card and may be available to individuals who don’t have the best credit scores, as lenders typically take into account the car’s equity when determining loan eligibility.
Tap into Your Car’s Value: Apply for a Car Equity Loan
The loan approval process for this type of financing can vary between lenders, but you can expect to provide information about your car’s value and any existing auto loans you have. You’ll also likely be asked to verify your income by providing W-2 forms, paycheck stubs or bank statements for full-time employees and tax returns or profit/loss statements for self-employed individuals.
Auto equity loans can be helpful if you need cash quickly for an emergency or to fund a large purchase, but they should only be used as a last resort. If you fail to make your monthly payments, your car could be repossessed and sold. This can negatively impact your credit score and make it harder to qualify for future loans or credit. This article will help you weigh the pros and cons of a car equity loan so that you can choose the right borrowing option for your situation.