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How to Negotiate a Good Deal on Loans Using Your Car as Collateral

Need access to cash fast? You’re not alone. Recent reports show that 78% percent of Canadians say their financial condition has worsened due to inflation. However, there are solutions available. For example, depending on your car’s value, getting loans using a car as collateral might be just what you’re looking for.

By leveraging one of the most valuable assets many GTA residents have, car title loans allow borrowers with less than great credit or no access to other standard financial products to access a substantial amount of capital quickly and with more favorable terms than other forms of borrowing, such as personal or installment loans. 

In this quick guide, we’ll examine how easy it is to secure these types of loans and offer advice on getting the best possible deal. Read on if you’re interested in taking advantage of an auto equity loan in Ontario and other parts of Canada.

What Is a Car Title Loan?

If you need a financial boost, car title loans are a great option in Canada. A car title loan allows you to access loans with a car as collateral. The amount you can borrow depends on the appraised value of your vehicle. However, the benefits of car title loans include quick access to cash and the ability to tap into equity (the equity you’ve accrued in your car).

Why such better terms and perks? It’s mostly because car title loans are secured, meaning they are less risky for lenders. This is because your car, which is used as collateral, acts as a guarantee of repayment. In Canada, car title loans are regulated by provincial laws, which means they are available in most provinces.

Qualifications for Collateral Loans

To qualify for collateral loans like a car title loan, you’ll need to be the registered owner of your car and hold a lien-free, clear title or be the owner of the company that owns it. Additionally, your vehicle must not have any outstanding loans from other lenders. Once your application is approved, you can access funds almost immediately one the paper work is signed by you (although the exact time varies depending on the lender you’re working with!).

All in all, car title loans are usually easier to apply for, and the loan process is streamlined. If you’re considering a car title loan, find a reputable lender who can offer competitive rates and terms. Most of these loans are short-term and usually come with minimal risks.

Is It Safe to Use Your Car as Collateral?

The answer is yes, as long as you choose a reputable lender. In Canada, car title loans are regulated to protect customers from unfair practices. The Canadian government has capped the yearly interest rate at 60% per year, for example, which is a whole lot better than the car title loan interest rates down south in the United States.

Additionally, reputable lenders have stringent security measures to keep your car safe. At Fast Action Finance, we want to see you succeed and work with you to ensure you get access to the money you need while also ensuring you remain the owner of your car.

Before signing any loan agreement, however, ensure you understand the loan terms and conditions. Make sure you only borrow what you can afford to repay and have a plan to repay the loan on time. By following these steps, you can use your car as collateral safely and responsibly.

How to Get Loans Using a Car as Collateral

As you can see, if you need quick cash in Canada, a car title loan can be a great solution. All you need is a car that’s fully paid off, and you can use it as collateral to secure a loan. Essentially, you’re borrowing money against the value of your car. Here’s how to get loans using a car as collateral in Ontario and other parts of Canada.

Step 1: Find a Reputable Lender

Not all lenders are created equal, so it’s important to research and find a reputable lender. Look for a lender with a good track record, flexible terms interest rates, and clear loan terms. You should also check reviews and ask if anyone you know has experience with car title loans.

Hint: We’re right here waiting to help you access personal loans using a car as collateral.

Step 2: Gather All Necessary Documents

You’ll need to provide certain documents to the lender to get a car title loan. These include:

• Proof of title ownership
• Two forms of ID (such as your passport, for example, and another form of ID)
• Your Onatio driver’s license
• Proof of insurance
• Utility bill
• Proof of income (if applicable)
• Void check
• Photos of your vehicle

Ensure you have all these documents in order before applying for a loan. At Fast Action Finance, we require eight high-quality photos of your car if you cannot bring your car into the office. If you have questions about those photos or any other aspect of the application process, chat with us to ask!

Step 3: Get Your Car Appraised

In Canada, when you use your car as collateral for a loan, lenders will use the Canadian Black Book value to determine the maximum value of your car. Typically, you can borrow 50% of that value.

Step 4: Negotiate Loan Terms

The lender will offer you a loan amount based on the value of your car. You can then negotiate loan terms, such as the length of the loan and the interest rate. Make sure you read and understand the loan agreement before signing.

Step 5: Receive Your Loan

If you agree to the loan terms, you’ll receive the loan amount in cash or as an email money transfer or direct deposit into your bank account. You’ll then make payments on the loan according to the agreed-upon terms. Be sure to make your payments on time, as you build a better relationship with the lender if they do not have to chase you regularly. Just like any type of loan, title loan lenders do not like to constantly process missed payments.!

Get Car Title Loans in Ontario

By following the process we’ve shared in this quick guide, you’re ready to access quick loans using a car as collateral. Still unsure where to start?

Our car title loans allow you to get the cash you need without having to go through the lengthy and complicated approval process that comes with traditional loans. So why wait? Contact us today to learn more about car title loans and how we can help you get the money you need.