Car equity loans are a great way to get ahead when you are looking for some quick money for an emergency, down payment or investment.
Did you know that your vehicle is a depreciating asset? It comes down to understanding “good” debt from “bad” debt. I am sure you have heard that good debt works in your favour and is usually fixed to an appreciating asset. While bad debt depreciates over time and financing a vehicle will always put you in the “bad” debt position, it can have some advantages as well. Bad debt can help those who need the credit to purchase things that they cannot purchase out of pocket.
In most cases, as soon as you drive your vehicle off the lot, the vehicle you purchased is losing 15% – 20% of its value and it will continue to lose 15% – 20% of its value every year after. Here’s where a car equity loan can benefit you.
Advantage 1: Did you know that you can make your money back out of your vehicle?
- There is a way to reclaim what you’ve lost in purchasing your vehicle.
- If you haven’t pulled the value out of your vehicle and you are looking to get ahead, there is a solution. Besides needing the money for something in your life that will get you ahead in the short term, you can invest the car equity loan into something that will provide a better return in the long term.
- If you have ever wanted to invest in real estate, the stock market, cryptocurrencies, or anything of the sort, depending on the market and some smart investing, you could make a decent rate of return.
- For instance, a person could take out a car equity loan and use it towards a down payment on a property. Real-estate already is known for its great return on investment for long-hold properties and you would easily recover the equity back out of your vehicle. You would recover much more than the interest rates you would incur on vehicle equity loans.
Advantage 2: Did you know the terms are often longer?
- There are many kinds of quick money and loan borrowers to assist those who have bad credit, but they are usually short term. Vehicle equity loans allow you to secure longer terms which will help keep the payments more affordable. This allows you to pay it back with ease over a longer period.
Advantage 3: Did you know that most people qualify?
- Having good credit is one of the tougher criteria to meet in financing. You really don’t have to worry about your credit score when you go to qualify for a vehicle equity loan. As long as you are in positive equity of your vehicle, you will qualify. Most vehicle equity lenders do not run credit checks on individuals who are looking to secure a loan.
Advantage 4: I don’t need to own my vehicle to qualify?
- If you are still making payments on your vehicle with the bank, you still qualify for a vehicle equity loan. Your vehicle must simply be worth more than the amount owing left on the vehicle and you get to keep your vehicle with car collateral loans.
With everything considered, we hope this information has alleviated any anxiety that would come with considering a vehicle equity loan and has better informed you how you might be able to recover the equity in your vehicle.