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Everything You Wanted to Know About Online Collateral Loans

By sbanderas | August 12 2020
Categories: Car Title Loans

Did you know that 53% of Americans have been rejected for credit cards and/or loans because of poor credit? You might be in this demographic and find it frustrating, as you aren’t able to get the loans you need.

However, not all hope is lost. There’s something called online collateral loans, where even people with bad or no credit can get extra financial help.

Are you interested? Then read on to find out all about online collateral loans and how to apply for them.

What Are Online Collateral Loans?

Collateral loans are a type of secured loan. This is where you give the lender an asset as security and extra reassurance so they’ll be more inclined to lend money to you. That way, if you can’t make your payments, they can then sell off that asset to make up for the money you aren’t paying them back.

For this reason, lenders won’t care as much about your credit score. In fact, some will approve you for secured collateral loans even if you don’t have a credit score at all!

As you may have guessed, online collateral loans are ones you can get through the internet. This means you don’t have to go speak to each lender to find out what they’re willing to offer you. You can also avoid using snail mail for your application.

Instead, the entire process can be taken care of and wrapped up promptly online. This means that the most time you’ll invest is in research. Once you’ve decided on a lender or broker to use, from application to approval, it’ll usually take under 24 hours!

Types of Collateral Loans

There are several types of collateral loans consumers can take out. Here are some of the ones you’ll see.

Mortgage

You’re probably already familiar with the concept of a mortgage. Typically, banks lend you a large sum of money so you can purchase a house.

This can be up to $400,000, depending on what the house is worth. You probably won’t get a mortgage for 100% of the value; it’s more likely you’ll get anywhere between 80% to 97%.

Then, over 15 to 30 years, you repay the amount to them.

Because this is such a huge sum of money, it’s natural that the lender wants some collateral. With a mortgage, your house is the collateral. If you default on your payments, then the lender assumes ownership of the house and usually sells it off to get the money you’d have paid them back.

Auto Loan

Auto purchases also take quite a bit of money, so many Americans also take out auto loans. Think of an auto loan as a mini mortgage; it works in the same way, but with slightly different terms.

Considering most vehicles cost significantly less than a house does, it’s logical that you can only borrow up to around $100,000 for auto loans.

The repayment terms are shorter as well. Instead of spanning decades, they’re under 10 years, usually 2 to 7.

Like with mortgages, if you can’t pay back your auto loan, the lender will become the owner of your car and sell it for cash.

Title Loan

A title loan is one where you use your car as collateral. Many lenders allow you to still use your vehicle while paying back the loan, which makes this a very convenient way to get extra cash when you need it.

While lenders typically only let you borrow around 50% of the car’s value, there are some exceptions. For example, we at Car Title Loans California can find you lenders that let you borrow up to 85%!

If you take out a title loan, do note that the term length is a lot shorter than with a mortgage or auto loan. Instead of getting around a decade to repay your debt, you’ll only have around 24 to 36 months.

Because the term length is so short, make sure you’re confident you can repay the title loan promptly. Otherwise, you risk losing your vehicle.

How to Apply for an Online Collateral Loan

Does an online collateral loan sound right for you? Then the next step is to apply for one.

The first thing you should do is look into the online collateral loan lenders available to you. Take some extra time to delve deeper.

Check out their business history and client reviews. You should also check out the details of their loans, such as the term lengths, interest rates, and other fine print.

Once you have an idea of who you want to go with, go to their website and you should easily find their online application form. Information you’ll need to input include:

  • Full name
  • Email address
  • Physical address
  • Vehicle information (for a title loan)

The beauty of applying for collateral loans online is you won’t have to wait anxiously for hours to find out if you’re approved or not. In the majority of cases, you should be notified of secured lending approval within minutes!

After reviewing all the terms and fine print, you can then digitally sign for the online collateral loan. When the lender receives everything they need (including any additional documents) and processes them, they’ll disperse the loan amount to your account within 1 business day!

Take Out an Online Collateral Loan Today

Online collateral loans can be a great way for you to get funding if your credit score isn’t great, or if you don’t have one at all. What’s great is the interest rate is usually lower than with unsecured loans as well.

So if you’re sure you can pay off your loan in a timely fashion, plus you have valuable assets you can use as collateral, then this loan option is definitely an avenue you should explore.

If you’re interested in a title loan, then apply with us today. You’ll receive approval within minutes!