When securing a loan, typical options require a lengthy application process and extensive paperwork. But there is an alternative solution that allows you to use the value of your vehicle to access quick funds, which is Car pledge (รับจํานํารถ, which is the term in Thai). In this guide, you can learn what car pledge is and explore its concepts.
Overall About A Car Pledge
A car pledge is also known as a vehicle title loan, and it is a financial arrangement where you would use your car as collateral to get a loan. Instead of focusing on the credit history solely, the lender will understand the value of your vehicle to check the loan amount. The title of the loan will be temporary and transferred to the lender until you repay the loan in total amount. Car Pledge offers you an accessible option if you are not qualifying for typical loans or you need quick access to funds without a lengthy approval process.
The Process Of Car Pledge
To initiate the car pledge process, you typically need to provide the lender with the vehicle’s title and ownership proof. The lender will understand the value of your car based on different factors like its make, model condition, and mileage. Once the loan amount is determined, you and the lender will agree on the loan terms, including the repayment and interest rates. After the agreement, you can hand over the vehicle’s title to the lender while retaining possession. Once you repay the loan, the title will be returned to you.
Benefits Of Car Pledge
There are several benefits of car pledges. The approval process is fast compared to typical loans, allowing you to obtain funds swiftly. The car pledge does not heavily rely on credit history, making it accessible if you’re poor or have no credit. You can also continue using your vehicle during the loan term, ensuring you maintain mobility and daily routines.
Risks And Considerations
While a car pledge can be convenient, you must understand the risks involved. Defaulting on the loan payments could result in the lender possessing the vehicle. You need to borrow responsibly and ensure that you can meet the repayment terms. Furthermore, you need to also carefully review the interest rates and fees linked with the car pledged loans, as they can vary among all the lenders. At the same time, you have to conduct thorough research, compare different options, and read the loan agreement before you proceed.