What is an Auto Equity Loan?

Posted: Wednesday, October 10th, 2018

An auto equity loan is basically borrowing against the value of your car by putting your vehicle title up as collateral. If you need cash fast it can be tempting to pursue an auto equity loan, however there are some things that you should be aware of before you make your decision. Learn more from the loan experts at Green Light Auto Credit.

Is an Auto Equity Loan the Right Choice?

An auto equity loan is a secured loan where the value of your vehicle is offered as collateral. The main risk involved for the borrower is possible repossession of his or her car if a payment is missed. Other things to take into consideration when deciding on whether or not to pursue an auto equity loan include:

  • Auto equity loan interest rates generally come with a higher APR.
  • Borrowers with a bad credit score can still get an auto equity loan, but should be very careful to fully understand the terms and rates offered by the lender.
  • If you still owe money on your car you can get an auto equity loan based upon the amount you’ve already paid off.
  • Other ways you can borrow against your vehicle include auto title loans and auto refinancing, but both of these also come with risks that you should take into consideration before you make a decision.

Our Car Loan Experts Are Here to Help

As with any financial decision, it is important to understand the risks before you make up your mind. Green Light Auto Credit can help you get a car loan even if you have a poor credit score, and we’ll guide you through the loan process so you can get the best terms and rates available. We make it easy for you to apply for a loan online, and our loan professionals are always happy to answer any questions you may have, such as, “Can I trade-in a car with negative equity?” Please don’t hesitate to contact us for more information.