Are you looking to buy a new or used car, but require finance? Here, we provide you with the information on what a secured car loan is and how it works.
- With a secured car loan, you can buy a new or used car with the principle amount borrowed being either partial or full purchase; price will depend on the fact as to whether you’ve paid a deposit or not.
- If you’re not able to make your vehicle’s repayments, a secured car loan offers collateral which in turn makes a safer loan than the other options that are there for the borrower as well as the lender.
What is a secured loan & how it works?
Assets with a fairly high worth like cars, equipment or houses are often available for purchases through secured loans. Then after, the purchased asset becomes security for the loan and would be treated as collateral if the borrower is not able to pay for the asset. If at all, such a circumstance occurs, the lender can sell the secured asset to reclaim and apply proceeds against the full borrowed amount. In case, the asset’s sale is not able to recover the balance owing on the loan then the borrower will have to pay the remaining amount to the lender.
Why choose a secured loan?
A secured vehicle loan provides much lower interest rates on the asset, which makes it a cheaper purchase compared to unsecured loans. As a result, borrowers become responsible for budgeting and making timely repayments.
The car will be repossessed by the finance company in the event where the borrower fails to make scheduled repayments of the secured car loan. A secured loan will typically be at a fixed interest rate, which means the repayment amounts will remain the same through the loan’s repayment tenure.
Car Loan Experts specialise in offering loans for quality used cars; nevertheless, we also offer secured car loans and new car loans. Surely, you’ll get affordable car loans for buying a new car or used car of your choice that too within your budget.