Car equity loans are secured loans that use your car as collateral, usually with flexible eligibility requirements. While they typically come with longer terms than other bad-credit options, they can come with high rates and fees. And if you can\u2019t pay off your auto equity loan on time, you could lose your car.<\/p>
A car equity loan is a type of secured loan geared to bad-credit borrowers that uses your car as collateral. It\u2019s similar to a home equity loan in that you don\u2019t always need to fully own your car to qualify. However, auto equity loans are typically more expensive and meant for emergency situations.<\/p>
How much you can borrow is based on two main factors: the amount of equity you own in your car and its fair market value. So if you have a car with a fair market value of $10,000 and you\u2019ve paid off 80% of your car loan, you can borrow up to $8,000.<\/p>
The good news is that car equity loans often accept bad credit borrowers, so you can consider applying even if your credit isn\u2019t in great shape. Besides having lenient credit score thresholds, auto equity loan lenders generally also require you to:<\/p>
Some online lenders might not require you to have a bank account to get a car equity loan, but many do. If you\u2019re looking for a loan and don\u2019t have a chequing account<\/a>, reach out to your lender to make sure you\u2019re eligible before you apply.<\/p>Compare car title loans<\/h3>