Can I Mortgage My Car?

If you’re in need of a little extra cash, but don’t want to take out a loan or sell your car outright, there is another option. You can borrow money against the equity in your vehicle and use it for whatever you need! 

So, can you mortgage your car? You can mortgage your car using a Car Title Loan which allows you to borrow up to 50% of the value of your vehicle. The vehicle’s equity becomes collateral for the loan and can be repossessed if you fail to repay, but it won’t affect your credit score.

The amount you can get really depends on the type of car you have, what your credit score looks like, and how much equity in your vehicle you want to put at risk.

In this article we will be discussing borrowing money against your car.

Mortgaging Your Car With A Car Title Loan

A car title loan uses your car as collateral for the loan, and you usually need to own a vehicle worth at least $2000.

The average borrower is able to borrow anywhere from $500-$5000 in cash, and they have up to 6 months or more time to repay it.

Interest rates on these loans are generally higher than unsecured personal loans but that’s because the risk of defaulting on this type of loan is much higher.

This type of lending can be very helpful for people who find themselves unable to get a traditional bank loan due their credit rating being too low, or because they don’t meet other requirements like having enough income or assets available. 

It’s important not only pay close attention to the interest rates but also the monthly payments, as well.

A car title loan is usually a good option for people with no other options available to them because it can help provide quick cash in an emergency situation that might not be possible otherwise.

If you’re in the market for a car title loan, it’s important to know that banks do not provide these loans. This is because they are high-risk forms of lending and don’t provide good long-term value to the bank.

If you need a quick cash infusion before your next paycheck arrives or if you have an emergency expense, there are other options available.

These include:

  • payday loans,
  • credit cards,
  • or even borrowing from friends and family members.

Before taking out any kind of loan though – especially one with bad terms like a car title loan – be sure to consider all your options carefully so that you can make the best decision possible for yourself and your future financial well being!

How do you know if your car is worth borrowing money against

The first thing you need to do is open up a new tab on Google and type “how much is my car worth” into the search bar and see what pops up.

There are many websites out there that provide information like Kelly Blue Book or NADA Guides which can give you an idea of what your current model might be worth.

Once you’ve determined how much your car is worth, you can expect to borrow approximately 50% of the value of the car.

You can borrow only upto 50% of the value of your car because you will be using the car as collateral for a loan and the bank or lender will need to be able to repossess the car in case you default on the loan.

It’s important that you do not default on your loans because if you lose this one asset (your car) you will have a hard time getting another loan.

What is the interest rate on a loan against a car

If you’re mortgaging you car, interest rates can vary from 6% to 25% per month. The interest rate will depend on your credit score, and what type of vehicle you are loaning against.

The interest rates on Car Title Loans are extremely high.

Normally, if you have good credit and are borrowing against any kind of new or used car, then an APR for that loan could be as low as 4-6%. If you don’t have good credit, then the best APRs would be 18-25%, but they can go up to 36%. 

So mortgaging your car costs a lot more than a traditional car loan.

What are the drawbacks of borrowing money against your car

Borrowing money against your car is a type of loan with serious drawbacks. By borrowing the money, you are taking out an additional debt that will have to be repaid later on down the line.

This means you’re not only going to owe more for your monthly payments, but also for the interest and fees associated with this type of loan.

If you can’t afford these payments in addition to all other obligations, then it’s best not to borrow any money from a lender at all! 

Borrowing money against your car is a good idea if you need cash quickly. If you’re in an emergency situation and don’t have any other options, borrowing from your vehicle should be considered.

However, there are some drawbacks to this type of loan that may make it not such a great option for long-term needs.

Things to consider before borrowing money against your vehicle 

If you’re considering borrowing money against your vehicle to help with the costs of everyday life, there are a few things you should consider.

First, talk to your lender about how much they charge for the loan and what that means for your monthly payments.

Second, determine if this will be temporary or permanent. If it’s permanent, think about whether or not it is worth trading in an asset like your car now before its value depreciates any further.

Finally, calculate whether or not you can afford the monthly payments on both loans (the one from the bank and also paying off the balance owed on your vehicle). 

There are some things you need to ask yourself before making the decision though: 

  • How much will I have to pay in interest? 
  • What is my credit score?
  • Can’t you just get a personal loan?
  • How will this Car Title Loan affect your credit?

Are there any risks involved with taking out a car title loan

There are several risks associated with mortgaging your car. These risks include:

  • high interest rates and monthly payments,
  • limited terms or length of time on the loan (often just 12 months),
  • no origination fees so they can’t be financed over time like most loans,
  • and lack of flexibility in repayment plans if you’re unable to make payments on time.

It’s important when considering a car title loan that you understand all the potential risks before making any decisions about whether to go through with the loan or not.

Conclusion

If you’re in need of a little extra cash, but don’t want to take out a loan or sell your car outright, you can borrow money against the equity in your vehicle and use it for whatever you need!

It’s important when considering a car title loan that you understand all the potential risks before making any decisions about whether to go through with the loan or not.

The risk of losing your vehicle is always present so if this possibility doesn’t sound appealing then we encourage you to explore other options such as taking out an unsecured personal loan.

Before deciding whether or not this is right for you, be sure to understand all of the risks associated with borrowing money against your vehicle’s title.