How Does a Secured Car Loan Work?

Signing Finance Documents for Car

What is a secured car loan and how does a secured car loan work? A secured car loan uses collateral in order to provide extra security to the lender. This gives you some advantages as a shopper, but it’s important to do your research before making the commitment. So, let the team at Dick Hannah Jeep explain the secured loan criteria – and get more tips and tricks from the finance department in Vancouver!



What is a Secured Car Loan?

What is a secured auto loan? A secured auto loan is designed to provide extra reassurance to the lender. In this case, you receive a car loan after you put down collateral – usually the vehicle itself. If you fail to make payments, your car can be repossessed. If you make your payments in full, the lender will remove the lien from your vehicle title and the vehicle is yours to keep.

Now that we’ve answered “How does a secured car loan work?,” You might also be wondering, “What is an unsecured auto loan?” An unsecured loan requires no collateral. If you fail to make payments, your debt is sent to a collection agency instead. Secured loans are often used for car payments and real estate, while unsecured loans are typically used for student loans and credit cards.

What is a Secured Loan Criteria?

Applying for a secured loan is just like applying for any other type of loan, and you can even get a head start with Dick Hannah Jeep. Here are the steps that you’ll need to take in the Battle Ground area:

  • Gather your documentation. You’ll need items like a social security number, proof of income, and a valid ID.
  • Get a credit check. Your dealership will run a credit check to make sure that you qualify for an auto loan, and this information will be used to determine your interest rates.
  • Approve your loan terms: Based on your qualifications and debt-to-income ratio, you’ll receive the fixed rates of your new secured car loan. Sign the papers, grab the keys, and head home to Longview!

Find Out More with Dick Hannah Jeep

Now you know the answer to the question, “How does a secured car loan work?” you’re probably wondering when can I get started right away? Apply for financing online to get the ball rolling, and our team will get back to you with more information. Still have questions? Contact us at any time! We’re located in Vancouver, serving the greater Portland, OR area.


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