What is a Secured Car Loan & How Does it Work?
If you're exploring your financing options for purchasing a vehicle in Frankfort, you may have come across the term secured car loan. But what is a secured auto loan, and how does it benefit you as a buyer? Essentially, a secured car loan is a type of loan where the vehicle you purchase acts as collateral. This arrangement provides lenders with security, which often leads to more favorable interest rates and loan terms for the borrower. So, if you're wondering if a car loan is a secured loan, the answer is yes! Understanding how a secured car loan works and knowing the secured loan criteria can help you make an informed decision when you're ready to own a new Lincoln vehicle. Read on to learn more about secured auto loans with the team at Lincoln of Lafayette, IN.
How Does a Secured Car Loan Work?
First, we have to answer the question: what is a secured auto loan? It's a loan that uses collateral, usually the car itself, as security. This means the car can be repossessed by the loaner if payments stop. In order to obtain one, you'll first need to contact our finance department to start the application process. You might also be wondering: is a car loan a secured car loan? Not necessarily. There are different kinds of car loans to choose from.
Once the paperwork is started, you'll need to provide personal information such as your name, social security number, and information on your current financial situation. A credit check will be necessary in order to be approved. Seeing your credit history combined with your income will help the decision to approve your application as you meet the loan terms as well as to decide your interest rates. Once your debt-to-income ratio is determined, and if you meet the loan qualifications, you'll be presented with the fixed rates of your loan.
You can then purchase the vehicle of your choosing and must make regular payments on the vehicle until the loan is paid in its entirety. After the loan is paid off, the vehicle is yours for the keeping. If the car is not paid off, and payments stop, the vehicle will be repossessed.
Secure Auto Financing at Lincoln of Lafayette, IN
At Lincoln of Lafayette, IN, we make securing auto financing straightforward and stress-free. If you're still asking: What is a secured auto loan? or How does a secured car loan work? Our finance team is here to guide you through the process. We'll help you understand secured loan criteria, so you can feel confident in your financing decision. Browse our inventory to find your favorite model, estimate your buying power, and then apply for financing to get started. Our finance team is dedicated to finding the best loan terms that fit your budget, so visit us near West Lafayette to explore your financing options.