If you want to buy a vehicle but don’t have all the cash you need, lending agencies offer a variety of auto finance loans to help with your purchase. Two common options are car loans and personal loans.
Before you can decide which loan will work best for you, you must know the difference between the two.
What is a car loan?
A car loan, as the name suggests, is given for the specific purpose of purchasing a vehicle. Car loans are automatically secured against the new vehicle. This means if you are unable to make your payments, the lender can repossess that vehicle to cover the loan. Since car loans are secured, the lender accepts less risk. This usually results in low interest rates. Although a car loan is secured, you will likely be required to have a down payment to access the loan.
What is a personal loan?
With a personal loan, a lender will give you money that can be used for a variety of purchases, including buying a car. There are two types of personal loans, secured and unsecured. With a secured personal loan, you use something you own as collateral. If you are unable to pay off your loan, the lender will then take possession of the asset that was used to secure your loan. One common type of collateral used for a personal loan is a car. With a car collateral loan, you use the equity in a vehicle you already own to secure the loan. If you opt for a car collateral loan, you will need to surrender the title for the vehicle until you have paid off your debt. However, you can keep trying the car while you make payments. Like car loans, secured personal loans typically have low interest rates.
With an unsecured personal loan, no collateral is used. For this type of loan, the lender accepts a greater risk and therefore might impose higher interest rates. The interest rates may also be subject to change throughout the duration of the loan. You will find that it is unlikely that you will obtain an unsecured loan if you do not have an excellent credit history.
Do you need a car collateral loan in Burnaby or Surrey?
If you need a short-term car collateral loan in Burnaby or Surrey, contact us at Instant Auto Loans. Instant Auto Loans is a family-owned and operated automotive financial institution that has provided loans to people all over Canada since 1986. We proudly provide our clients with courteous and confidential service.
At Instant Auto Loans we will give you a loan based on the equity in your vehicle. Our loans are easy to qualify for and have straight forward repayment terms. The loan process can be completed in three simple steps and take less than 15 minutes.
So, what are you waiting for? Apply now online for your instant auto finance loan and let us help you overcome your short-term financial obstacles.