No Collateral Loan Quote
Before you commit to a collateral or secured loan, why not see if we can help you get an unsecured loan offer. At Loan Monkey, we give you access to a huge network of lenders used to working with bad credit. It takes just a few minutes, with only basic information, to get an answer. Also, there is no obligation and it is completely free so let’s get started.
If you can not get a cash advance online or one without collateral, this type of loan might be your only option. Unsecured loans are usually a better option for a cash loan but if your options are limited and you you may need to consider them. Let’s take some time and learn about these loans.
What Is A Collateral Loan?
With a collateral loan, you give the lender a claim on a piece of property. If you default on the loan, they then have the ability to take the property and sell it. They would then use the proceeds of the sale to pay back the debt and would give you an money that was left over, if there was any.
The most common collateral or secured loans are home and auto loans. The bank issuing the bank has rights to these pieces of property until the loan is completely paid off.
With the above two examples, the lender had an immediate claim on the property in question because the loan was issued to make those purchases. So, what if you need cash and have property that you can put up?
The two most common collateral loans in that case would be the pawn loan and the title loan. Both have their own set of problems that you should be aware of.
With a pawn loan, you put up a piece of property in exchange for a cash loan. Good news for you is that you can get cash the same day. Bad news is that it will not be that much cash. A pawn shop is going to give you only a fraction of what your property is worth so these are best for small loans with bad credit. In addition, they are going to hold your item and charge you storage fees on it in addition to the interest charges and documentation fee.
With a title loan, you use the car title of your vehicle as collateral. Your lender would then issue you a cash loan with the usual high fees and interest. This is a dangerous loan because if you default, you will lose your vehicle. You think you need money now, wait until you have no car. Thousands of eople lose their vehicles every year to title loan companies.
Is A Collateral Loan A Good Choice?
That really depends on the type of collateral loan.
Home and auto loans, the most common types, are good choices. Getting a loan for the size needed to buy one of these items would be difficult, if not impossible, without making it a secured loan.
Cash loans are another matter altogether. They usually carry the high interest of an unsecured loan but with the added ability of the lender to take your vehicle. You are essentially allowing the lender to take on almost no risk but still charge you high risk interest rates. If you can avoid a title loan, you absolutely should.
The ultimate choice is up to you and your particular situation. With a collateral loan bad credit is not as big of an issue. If you need money badly and have no other source, it might be a loan you should consider.
Secured Loan Alternatives
There is always an alternative but it does depend a bit on your credit. Let’s look at some possibilities.
This is the type of loan that we give you access to. The lenders in the network may be able to help you even when others have said no. How? Because they are used to working with borrowers of all credit types and often issue bad credit monthly payment loans. There is no fee to find out if you can get approved, so why not fill at the form at the top of the page and find out.
Borrowing From Family
Depending on the amount that you need, you might be able to borrow from family or even a friend. Just be respectful and get EVERYTHING in writing. You need to be able to prove how much you borrowed and that you paid it back, in case figures get fuzzy later. Never pay back loan with cash if it can be helped because it would be your word against theirs, unless you get a receipt.
Do Without The Loan
If the loan is something that you can do without, you probably should do so. If it is, for example, to buy a four wheeler, you should probably pass.
If this is the case, take the time to start improving your credit. Credit is actually very easy to improve with a bit of discipline. All you need to do is.
- Pay Your Bills On Time
- Pay Down Your Credit Card Balances
- Dispute Negative Information
- Limit Inquiries
Doing those four things and waiting a bit might just be enough to improve your score so that next time, you can get a no collateral loan. That would allow you to save your property from risk and probably get a better interest rate.