These loans are for borrowers who are still making payments on the vehicle and do not yet own it in the eyes of the law. The legal owner is the lien holder-usually the bank or credit union that originally financed the purchase of the car. Regardless, you may still qualify for equity loans if you have sufficient equity in the vehicle.
car title loans
The minimum amount of equity needed varies from lender to lender, but a general rule of thumb is that you will only be able to get a loan in the amount of 50% of your equity. That means in order to qualify for a $1,000 loan, you'll need to have at least $2,000 worth of equity in the vehicle.
Other important points to keep in mind regarding auto equity loans include the following:
o You must be at least 18 years old, employed, have a valid driver's license, and show proof of insurance on your vehicle.
o You will have to provide documents detailing the remaining balance on your original loan, as well as your payment history.
o One condition of the loan contract will be that you agree to let the new lender take a security interest in the car, allowing them to seize the vehicle if you do not repay the debt on time.
o You will be able to continue driving the car as usual for the duration of the loan.
o People with very poor credit ratings may have trouble getting approved for loans.
Auto equity loans