When you want to get an auto loan, it is understandable that you would want to be completely aware of all the ins-and-outs of the loan deal you will be making. A significant part of the loan decision process will include whether an auto loan is secure or not.
What is a Secured Loan?
For those who may not be aware, a secured loan is essentially a kind of loan where the borrower presents the lender with something valuable as collateral. This ensures the lender has a way of making their money back, even if the borrower defaults on the loan.
If the borrower defaults, the lender could seize the collateral and sell it at auction to cover their losses. Examples include, but are not limited to, vehicles, houses, stock certificates, savings accounts, home equity, etc.
What is an Unsecured Loan?
An unsecured loan is exactly what it sounds like. It is the exact opposite of a secured loan, in that there is no collateral involved when the agreement between the borrower and the lender is made. This essentially means that the lender is putting complete faith in the borrower being able to repay the loan in its entirety, and on time.
If a borrower does end up defaulting on an unsecured loan, there is little the lender could do aside from hiring a collection agency or sue the borrower for the money that is still on their balance.
These kinds of loans are not easy to obtain because in order to qualify, a lender must have faith in you. An inquirer needs to be able to show their credit is currently in excellent standing. This is typically not something that most people will be able to do.
Are Auto Loans Secured?
Some auto loans are, but some are not. In most cases, auto loans are secured loans because that is the only way that the bank or lender may feel comfortable providing someone with the money they need to buy a car.
A lot of people do not have credit that is high enough to obtain an unsecured loan, and thus need a way to assure their lender they will be good for the money that they are provided with.
That said, most auto loans will use the car that is being bought as the collateral for the loan. If the loan defaults, then the car will be seized and sold at auction in order to cover any of the lender’s losses.
Unsecured Auto Loans
It is possible to get an unsecured loan for buying a car, but it may not be easy. Cars cost quite a sizable sum of money; most lenders will not want to give out that much money without some guarantee that they will get it back—in a timely fashion.
Having an excellent credit score and credit history will be absolutely vital if you want to obtain an unsecured auto loan. There are advantages to obtaining an auto loan. You could end up having less paperwork, you could receive the money you need before deciding what car to buy, you could get a better interest rate, and more.
Get an Auto Loan Through MaxCash
If you are trying to obtain an auto loan, but are not having a whole lot of luck, things could be looking up for you if you come to inquire with MaxCash. Every day, we help people get behind the wheel by facilitating auto loans with all of the best lenders in the business. We could get you the loan you need, sometimes in as little as one business day, once you qualify.
We take care of all the work for you. You do not have to worry about doing any of the searching or negotiating. We have it all covered, as we have formed close relationships with the lenders we work with. All you need to do is get in touch with us to get the ball (and the wheels) rolling!