Asset loans seem to be very popular these days for securing quick short term loans without the red tape process banks require. You should however be aware of how these loans work and what you are getting yourself in for.
An asset loan as the name suggests is a loan given to you based on the value of an asset you possess. These assets are typically cars but can include jewelry, boats, antiques, memorabilia and so forth.
To secure an asset loan all you need to do is visit your local company with your asset, fill out a loan agreement and hand over the asset. The loan company takes possession of the asset until the loan has been repaid in full. The big upside here is the whole process typically takes no more than 30 minutes and you are not subject to background checks, credit history searches etc.
Ok, so that’s how the loan process works, what should look out for? As with any financial transaction you embark on it is important to do your homework first. There are many dodgy asset loan companies out there who charge ridiculous interest rates and essentially prey on peoples desire for quick cash solutions.
It is absolutely vital you do your homework before going down this road. Always compare at least 3 companies before deciding on who to go with as their evaluations and interest repayment rates can vary drastically. An example of a reputable car pawn loan company is the aptly named CarPawnLoan.co.za and you should look for similar transparent companies in your area.
Also keep in mind that you will be required to hand over the asset to the loan company, and should you default on repayment and have not notified the loan company to make a late payment arrangement, you may lose your asset. The loan company like a bank needs to manage its risk by recouping any defaulted loans and they will sell the asset very quickly in most cases.
So in summary, yes you can get quick cash without the banking process of securing a loan, but be sure to compare companies, check the repayment period and interest rates and don’t miss your deadlines or you will kiss your asset goodbye.