A secured car loan is similar to other secured loan products in that the lender has an item of security that they can repossess if you are unable to repay the debt. In the case of secured car loans, this asset is usually the car itself. However, some lenders will require the item of collateral to be your home instead.
Secured car loans typically have lower interest rates than loans that are unsecured. It is also much easier to obtain a secured car loan than an unsecured loan because you are offering an asset as security so the perceived risk for the lender is significantly reduced.
You can typically borrow up to £25,000+ with a secured car loan, depending on your financial situation and the lender that you deal with. At SecuredLoans.com, we will compare the entire UK market to find you an appropriate loan product with a policy that suits your specific needs.
Most lenders will allow you to choose the length of repayment for the loan and this period is normally referred to as the loan “term.” There is usually a maximum term, but this could be a long as 15 years with a secured car loan. However, it is important to note that the longer you take to repay the debt, the more the loan will cost you as the interest is charged annually.
If you start missing repayments on a secured car loan, you will be putting the car (or other collateral) at risk of repossession. Your lender will have the legal right to seize your asset and sell it to recover the debt that you owe them. Repossession will not occur if you only miss one or two repayments, but it is always important to inform your lender as soon as possible if you think you might start falling behind on your payments. Vehicle repossession is a usually a last resort for the lender as they would much prefer that you carry on with your loan repayments, so it is always best to keep an open line of communication with them if you are having financial difficulty.
If you need advice or you would like a free, no obligation quote regarding a secured car loan please do not hesitate to contact us.