{"id":10587,"date":"2022-10-26T12:26:19","date_gmt":"2022-10-26T12:26:19","guid":{"rendered":"https:\/\/chettioan.com\/?p=10587"},"modified":"2023-01-26T06:51:56","modified_gmt":"2023-01-26T06:51:56","slug":"credit-security-on-four-wheels-the-car-deposit","status":"publish","type":"post","link":"https:\/\/chettioan.com\/credit-security-on-four-wheels-the-car-deposit-10587.html","title":{"rendered":"Credit security on four wheels: the car deposit"},"content":{"rendered":"

Many people don't realize that they have the credit protection that would be enough to start even a small business: their own car. The reason why many are not yet aware of this: banks do not recognize a vehicle as collateral. The problem is as old as credit itself: If you have standard bank collateral, you basically don't need a loan. Those who need a loan often do not have the usual bank collateral. Escaping this vicious cycle is not easy. But there is a remedy.<\/p>\n

Those who cannot get a loan from the bank because their credit rating is not sufficient for it, in most cases turn to their private environment. And that's where the next vicious circle opens up: People who have friends or family members so wealthy that they could help them out with a personal loan usually have enough money themselves or bank-standard credit ratings. Unfortunately, it turns out in most cases that the financial possibilities in the circle of acquaintances or in the family are more or less the same as your own. Therefore, no help can usually be expected from this side either.<\/p>\n

An alternative that has developed recently are credit portals. On them, loan seekers register their needs, and many small lenders collectively provide the desired amount – if all goes well. The problem with this is that lending platforms also usually carry out a credit check, and this is roughly similar to that of banks. Even if you make it through the credit check, the loan is not yet in the bag. The lenders evaluate the credit request often very subjectively. In other words: The loan request must "please" them, so that they support it. This often turns the loan application into a game of chance.<\/p>\n

Back to the beginning. Basically, there is a high-quality loan collateral: the own vehicle. Stupid only that neither banks nor friends or credit portals recognize that. Here a new player enters the stage: the pawnshop. These useful institutions evaluate and lend objects – completely without credit rating, completely without proof of income, completely without Schufa. So far, however, there has been one drawback to this: regular pawnshops are overwhelmed with lending on high-value items. Their business is in the two- to three-digit range, sometimes even in the four-digit range. This circumstance was the reason for the birth of the car pawnshops.<\/p>\n

Car pledge – what is it actually?<\/h2>\n

Auto pawnshops close the gap in the credit offer for credit seekers in the middle credit range with low creditworthiness. Car pawn is a pawn transaction like any other, only in the higher value range. And a pawn transaction is basically nothing more than a loan – a fact that many are not aware of.<\/p>\n

The loan by car pawn can – if desired – be done very quickly. The vehicle is driven up, appraised by the pawnshop, the pawn loan agreement is signed, the amount is disbursed in exchange for the handover of the car's papers – that's it. In rare cases, the pawnshop may ask for a little time for technical evaluation, but even in this case, the disbursement will be much faster than if the loan is granted by the bank.<\/p>\n

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A loan through the car pawn route comes with some significant advantages. The most important one is of course – as already mentioned – independence from one's own creditworthiness. The rating of Schufa does not matter, as well as the amount of current income. The asset statement can stay in the closet. All that matters is the vehicle, its current value and its technical and optical condition. Only these values decide on the granting of credit. In addition, there is the rapid processing and disbursement.<\/p>\n

One aspect that speaks for the loan by car pawn has not yet come up: the variable term. While bank credits – in addition, private loans – usually exhibit a fixed term, the borrower determines by autopledge, when the time for the repayment has come – naturally within the agreed upon pledge running time. The premature repayment is impossible with many conventional credit contracts or connected with substantial additional costs. Not so with car pawn. Here, the borrower determines when it's time – without any deductions.<\/p>\n

Credit without credit rating requires responsible action<\/h2>\n

In order for auto-pledge lending to be an all-around positive experience for the borrower, some honest consideration is required on their end before taking this step.<\/p>\n

The ability to take out a pawn loan without a credit check or proof of income is a great opportunity to implement personal plans and achieve goals. But it also requires an open and honest assessment of the personal situation – a self-initiated credit check on one's own behalf, so to speak.<\/p>\n

Even if your own income or assets are not proven, they must still be available at the time of repayment – at least if you ever want to see your vehicle again. In other words, there must be a concrete and realistic plan of how the repayment will be made. Therefore, any loan seeker who wants to provide their vehicle as collateral should first ask themselves these questions:<\/p>\n