Five Myths About Collateral Loans on Vehicles
When you need quick cash but do not necessarily have a lot of assets to use, like gold and silver jewelry, a viable option is to use your vehicle to obtain a collateral loan. As long as you own your vehicle and there are no other liens against it, it could help you get the cash you need.
However, many people are not even aware of this option or think they do not qualify, thanks to several myths about collateral loans. Let’s take a look at several of these myths and why it could be very easy for you to use your vehicle for a cash loan.
- You need good credit and a decent credit score.”
Not having good credit or a decent credit score does not stop you from getting a loan using collateral. In most cases, qualified lenders do not even pull your credit report when you are using your vehicle as collateral. They have an asset they can sell to recover the money they lend you should you default on the loan.
- “All collateral lenders charge high interest”
This is not true at all, and interest rates can and do vary from one lender to the next. Some collateral lenders offer very competitive interest rates, similar to those you might find at a bank. The thing to remember is the total cost of lending summary which all lenders must provide. This will tell you exactly how much you will pay back on the amount you borrow.
- “The interest on collateral loans on vehicles is higher than payday advance loans.”
Actually, the interest on vehicle collateral loans is much less compared to payday advance loans. In addition, collateral lenders tend to offer longer repayment periods so you have more time to pay back the money you borrowed. If you were to read through the fine print on payday advance loans, you might be surprised to see the annual percentage rates are 100% or even 1000% interest!
- “A collateral loan cannot help reduce your debt.”
If you use the money you obtained from the collateral lender carefully, you could use it to help pay down your debts. For instance, you have four smaller debts that all have higher interest rates than the interest on the collateral loan. By using the loan money to pay off the four smaller debts, you are left with just one less expensive loan payment.
- “You can only use your vehicle once to get a collateral loan.”
You would be surprised by how many people believe this myth. Truthfully, you can use your vehicle numerous times as collateral, so long as the previous loan has been paid in full.
Why Get a Collateral Loan from GEM Pawnbrokers?
GEM Pawnbrokers offers several benefits when you want to use your vehicle to obtain a collateral loan:
- No Credit Checks
- No Credit Needed
- Instant Cash Loans
- 24 Convenient Locations in the NYC Area
- Can Pay the Loan Back in One Lump Sum
- No Monthly Payments Required
- Can Have Up to 4 Months to Pay Off the Loan
- Over 70 Years in Business in the NYC Area
- Highest Prices Offered on Vehicle Loans
- Competitive Interest Rates
- Friendly Expert Staff
To learn more about our collateral loans or to apply for one, please stop by your nearest GEM Pawnbroker location or call us at 718-596-5626 today!