Short Term Loans
Can I get a short term loan from my bank with my car as collateral?
My car title is free and clear. It’s a 2002 Olds Alero. I’ve heard bad things about title loans from local title loan companies. The problem is my credit is not too great. My car is worth way more than I want to borrow. I only need around 300 – 500 dollars. Is it possible to qualify for a loan with the car as collateral?
No, unfortunately banks don’t view cars as collateral. Instead they view them as a liability. The reasoning behind this is that although you may want to borrow less than the car is worth…most banks see it as too troublesome. For one if the car breaks down and you cannot afford to repair it…if it gets involved in an accident and gets written off…you could potentially sell it…the bank doesn’t want the hassle of trying to get their money back through a foreclosure or debt counsellor…and they don’t want to deal with auctioning off of assets. I think you need to do an assessment of what you require versus what you are spending and rebuild your credit rating slowly. I have gone through the same problem with bad credit and it took me 7 years to wait for my credit record with the credit reporting agencies to clear my name. Hope this helps.