If you need a loan but have bad credit, you need to know which loans to get without delving into your credit history. There are many different types of loans to be aware of. By choosing a collateralized loan, you can use your collateral for repayment in case of default. Title loans are just one example of this type of secured loan. Read the following information to learn how a collateralized loan can be applied.
To support your loan request, title loans can help you get a secured loan in a short matter of time. If you run into a financial emergency and need to clean up credit, you can always secure a loan with the title of your car. That is why car title loans are often used for emergency repairs such as a plumbing catastrophe or an electrical replacement.
Comparatively, title loans are similar to credit card loans. You take out the loan for a financial emergency for a short time. This time period is normally a month. In exchange for the financing, you agree to give the lender your car’s title until you have paid the loan amount in full.
Because title loans do not require a credit check, application processing takes about 45 minutes. To get this secured loan, you need to have built up equity in your car. Some title loan lenders require that car owners own their autos free and clear or owe no money on the vehicle. Once you get approved, a lender will place a lien on your vehicle title until you pay off the loan.
Home Equity Loans
If you need a longer-term loan to pay for a home improvement or similar expense, you may consider taking out a home equity loan. This loan, also known as a second mortgage, is an extra loan that you take out besides your main mortgage. You use the equity in your property as collateral for the new loan. Many homeowners take out home equity loans to make improvements in their homes. They use the increase in their homes’ value to offset the loan cost.
You can also obtain a pawn loan if you have bad credit and want collateralized funding. What you give the pawn shop to hold will serve as your collateral. Some pawn shops take fine jewelry, musical instruments, or precious metals as collateral. If you cannot pay back the loan, the shop will keep the item or items that you use to secure the loan. By using this approach, you don’t have to worry about a credit check or about problems if you should default. If you need some money for emergency cash, you will find a number of pawn shops ready to accommodate your loan needs.
Savings and CD Collateralized Lines of Credit
You can also go to your neighborhood bank and ask for a line of credit that uses your CD account or savings account as collateral. In addition, you can use these accounts to secure a personal loan with your bank. The amount of the loan will be based on the amount in the account that you can use for collateral. Loan amounts may range from $3000 to $250,000. The certificate of deposit or savings account continues to earn interest while you are paying off the loan.
Collateralized loans are an excellent way for bad credit borrowers to gain access to quick financing. Title loans are a source of financing that secure the title of your car. You can also use a home equity loan to use your residence as collateral. Savings and CD lines of credit use funds within your bank accounts or certificate of deposits as collateral. Furthermore, pawn loans issue funds while holding your assets as collateral. Consider the points above to learn about the top types of loans that require collateral.