Christian Auto Pawn Loan
Christian auto pawn loans are given when money is loaned and a car is used as the collateral for the borrowed money. With an auto pawn loan, a car owner gives the title to a lender, using the automobile as security of repayment for a cash advance. With this type of advance, owners still drive and use the car. This process is much like taking out a second mortgage on a home; only the collateral is an automobile instead of a house. A vehicle cash advance can be relatively simple to qualify for, but there are stipulations involved. There may be many reasons to consider a cash advance, and consumers can find more information about this type of second re-financing online. As with any borrowed money obtained, vehicle owners are cautioned to carefully consider all options before entering into a contractual agreement with any lender.
Vehicle cash advances are also called car title loans. The car owner places his or her title in the keeping of the loan company, just in case the borrower defaults on their repayment agreement. The title verifies that the car has been paid off, and now the lender holds the title. Consumers can receive as much as $2,500 in cash for the auto pawn loan. To qualify, the owner must be at least eighteen years of age, own the vehicle outright, and be a U.S. citizen. There may be other qualification standards, and owners seeking any auto pawn loans should check with each individual lending company for further standards.
There are many circumstances and events that can lead a family to need quick cash. Car title loans have been used to get the extra cash needed to send a child off to college, for example. They have also been used to supply the cash for an urgent household repair. There are circumstances such as sickness and loss of a family member that lead car owners to refinance for the cash needed to supplement living expenses. Whatever the reason, this type of financing can get owner cash, and allow receipt of it fast.
Caution is strongly advised before entering into a title loan agreement with a lending agency. If the auto pawn loan is not repaid within the terms listed, usually thirty days, then the default could result in the repossession of the car. These lending agencies can legally sell the car to obtain repayment of auto pawn loans and interest fees. If the borrower is in a financial struggle, they should first turn to the Lord about all that is troubling them. He truly cares and knows what every need is. "Therefore take no thought, saying, what shall we eat? Or, what shall we drink? Or where withal shall we be clothed? (For after all these things do the gentiles seek:) for your heavenly Father knoweth that ye have need of all these things. But first seek ye the kingdom of righteousness; and all these things shall be added unto you." (Matthew 6:31-33)
Auto title loans are short term loans, usually for no longer than 30 days, with a car title used to secure the amount borrowed. This means that if the owner can't or won't repay the debt, the lender may take the car and sell it to get the money back. An auto title loan usually attracts people with bad credit, low income people and the elderly. The money made from this type of lending is from the high interest rates and the repossession of the cars.
To obtain this form of lending, one must have a clear title, liability insurance, be currently employed and at the current residence for more than six months. Most auto title loans from these lenders are between $601 dollars and $2,500. The reason for the $601 figure from the lenders is that if the amount is over $600, they can charge high interest rates. The normal interest rate is twenty five percent.
If at the end of the 30 day repayment period, the borrower cannot repay the auto title loan, the lender will accept the interest payment and allow the debt to rollover for an additional month. If the amount lended was for $600, the interest payment would be $150. If interest rates only are paid on the auto title loans, one would still owe $750 the next month. It is possible for borrowers to make substantial payments over a period of time and still lose the vehicle.
This type of lending is typically made for a fraction of the value of the car so as to protect the lender. Some states allow the lenders to keep the excess on the sale. Although when procuring such lending, the amount should not be more than the fair market retail value of the car. This is determined by common industry appraisal guides. If one feels the need for an auto title loan, it's best to protect themselves by first checking the NADA or Kelly Blue Book value of the vehicle.
These loans are simply high interest debts where the effects can be devastating if car owners are unable to repay the debt on time. Consumers can end up paying high interest and lots of money and still lose the vehicle. It's wise to look at other options first. "Wisdom is before him that hath understanding; but the eyes of a fool are in the ends of the earth" (Proverbs 17:24). If at all possible, before seeking out what sounds to be a simple, quick fix with an auto title loan, consumers should seek out other sources that offer a lower interest rate. They may be placing the vehicle at risk and could be trapped into a vicious cycle of debt.
Christian Auto Collateral LoanAn auto collateral loan requires a prospective borrower to provide a down payment, assets, or even secure a co-signer in order to receive financing on a new or used vehicle. Typically, prospective borrowers who have limited credit or bad credit are good candidates for auto collateral loans. But since these are higher risk loans, the lending institution is assuming a larger liability and will typically increase the interest rate as compared to someone with a good or excellent credit score.
Before applying for auto collateral loans gather the information the lending institution requires. Typically a prospective borrower will need to show a recent pay stub as well as their employer's contact information, a social security number and personal contact information. Often times, when applying for auto collateral loans personal references of a close friend or family member will be required by the lending institution. Arrangements for the collateral or the assets to secure the auto collateral loan will need to be made. Examples of collateral might be, another vehicle that is 100% paid in full, a lien against a house or any item the bank can liquidate for cash if the borrower defaults on repayment of the loan.
Most loans of this type typically have payback options ranging from four to six years. The borrower will make monthly payments to the lending institutions. Usually there are no repayment penalties on an auto collateral loan if you repay it in a shorter amount of time then what is predetermined. The average interest rate is approximately five percent. An individual with good credit wanting to purchase a vehicle that costs twenty thousands dollars with a five percent interest rate can expect to have a monthly payment of about four hundred dollars for sixty months. Many lending institutions will help you determine the amount of auto loan needed.
Employ wisdom when looking a vehicle to purchase and secure auto collateral loans to finance your purchase. Purchasing a vehicle is a serious decision which should take some time preparing and planning to find the right vehicle and the most appropriate auto loan program for you. Through God's Word, especially in the book of Proverbs, He encourages Christians to seek after wisdom. "Let thine heart retain my words: keep my commandments, and live. Get wisdom, get understanding: forget it not; neither decline from the words of my mouth." (Proverbs 4:4-5) As you begin the loan process ask God for wisdom.
A private party auto loan usually comes about because a neighbor or friends is selling a vehicle, however, it might also result from a newspaper ad by someone in the area. The only difference between private party auto loans and others is the absence of a dealer. The Internet provides a long list of providers, or the buyer can deal directly with his bank to close the transaction. Either way it will be necessary to complete a loan application and provide the make, model and mileage of the vehicle to be bought, and the seller's name and phone number. Private party auto loans are pretty straightforward. Online a buyer can go through a broker who will put him in contact with four possible lenders to consider.
Qualifications include: (1) Borrower must be 18 years old; (2) must have a minimum income of $1,800 per month or $21,600 per year; (3) must have lived at last two residences at least six months; (4) must have worked for the last two employers more than six months each; (5) have no open bankruptcies; (6) have a valid Social Security Number. Most people would have little trouble meeting these requirements. An advantage of buying a car through a private party auto loan is that there is an opportunity to talk to the previous owner about the car and its history. If the seller is someone personally close, there is the immediate advantage of knowing how he has taken care of the vehicle.
Before closing the deal, it is wise for the Christian buyer to have a mechanic check the vehicle for any problems that might exist, or parts that may need replacing soon. Buying a pre-owned automobile through a private party auto loan doesn't have to mean buying someone else's problems. Integrity is important factor in any business dealing, and reference can be found in scripture: "Let integrity and uprightness preserve me; for I wait on thee." (Psalm 25:21) Lenders check the "blue book" price for a vehicle of the age and make under consideration before agreeing to financing the car, but it is a good idea for the buyer to check that as well. Then there is no doubt that the value has been correctly stated. The interest charged in private party auto loans may be higher than those arranged when buying through a dealership, but the paper work is less, and time is saved.