Did you know you can get a secured loan in South Carolina? If you need a short term loan, consider a secured loan. A secured loan is a type of loan where the borrower promises to surrender some form of collateral to the lender if they fail to repay the loan, like a car or house. Generally, whatever the borrower uses for collateral must be more valuable than the loan they are receiving.
What’s the difference between a credit card and a Secured Loan?
Both require that the borrower make a regular payment to the lender. There are two major differences:
- Available Credit
- Interest Rate
Available Credit: As with most loans, a secured loan generally provides you with a fixed amount of money. If you wanted additional money, you would need to apply for an additional loan. In contrast, a credit card is actually a line of credit; you can draw on it as needed.
Interest Rate: Generally, the interest rate on a secured loan is fixed. This means it will stay the same for the duration of the loan. Credit cards often have interest rates that can change based on things like changes to your credit score or missed payments.
What are the different types of Secured Loans?
There are two common secured loans:
- Vehicle Loan
Vehicle Loans: Typically, vehicle loans involve the lender paying the full price for a vehicle. The borrower then pays the lender back, plus interest, in installments for the duration of the loan.
Mortgages: These loans have a long repayment schedule, up to 30 years. Because they are designed to be used to purchase things like a house and involve using property as collateral for the actual loan, their application process can be extensive.
Other Secured Loans: A loan can also be secured against something like an investment portfolio or a savings account. You’ll lose access to the account for the duration of the loan. And, if you use an investment portfolio, your lender may demand a payment to cover the difference between the remaining loan amount and the value of your portfolio.
How much money can I get for a Secured Loan?
The type of loan you get will determine that. A vehicle loan is intended to cover the cost of a car. Therefore, you’ll be able to borrow the value of whatever car you are purchasing. In contrast, something like an unsecured, short-term loan will probably only be for a few hundred dollars. In general, if you secure your loan with collateral, your lender will be able to provide you with more money, for a longer time, at a better interest rate1. Often the value of a secured loan is tied directly to what you are purchasing with it. There are some exceptions, like an auto title loan, where you can use the money for whatever you need.
What happens if I can’t pay back my Secured Loan?
Once you miss a payment by 30 days, your lender may report it to Experian, TransUnion, and Equifax, the three major credit bureaus. Your credit score may take a hit, and this can impact your ability to get loans in the future for things like student loans, a car, a house, etc. If you are 60 days late, they may report it again, and continue to do so at 90 days and 120 days, etc. Because of this, a single loan can have a major negative impact on your credit history. Depending on the type of loan, lenders may take borrowers to court over past-due accounts. This can result in a lengthy court battle. If the borrower loses, they’ll be responsible for the original loan, their own court fees, and possibly the fees of their lender. If they can’t pay, the court may force them into bankruptcy.
When a borrower defaults, their lender can start the repossession process of the collateral. Once it has been repossessed, lenders typically sell it to make back some of their investment. The borrower may be entitled to the money that is left over from the sale, once the balance of the loan and the lender’s costs have been paid off. This varies by state, however.
What’s an Auto Title Loan?
It’s a type of loan secured through a qualifying car title, without a lengthy application process. As with other secured loans, you make a monthly payment of interest, along with part of the principle, during the term of the loan. Similar to vehicle loans and mortgages, auto title loans are secured with collateral, so you may get a better interest rate then you would expect with an unsecured loan. This is because auto title loan lenders generally value your ability to pay and the worth of your car over your credit score. There are a few simple things you need to sign up for an auto title loan:
- Qualifying title for the vehicle in your name
- Photos of the front, back, and sides of vehicle
- Proof of Income
- Government-Issued I.D. (Driver’s License, State I.D., Passport, etc.)
- Proof of Residence (Certain pieces of mail)
How to get a Title Loan with LoanMart
Most secured loan lenders limit what the loan money can be spent on, and have an application process that can be too long, especially if you need to cover an emergency expense. Neither of these things are true about an auto title loan from LoanMart. You can use your qualifying vehicle title in your name to potentially be eligible for an auto title loan of up to $30,0001. And because LoanMart uses a streamlined application process, the time between when you submit your information and when you receive your loan might be less than 24 hours3.
With our easy process, we give you three ways to contact us that make it convenient for you:
- Visit a participating store
- Call us at 1-877-787-4923
- Sign up online without leaving your home
Once you’ve decided how you want to get in touch, just follow these steps to get the money you need1:
- Fill out the registration form
- Submit your important documents to your LoanMart representative
- Sign your LoanMart agreement
- Collect your funds!
If you are thinking about a secured loan to help cover an unexpected expense, LoanMart may be able to help you get the funds you need1.