Taking into account the high national interest rates, this type of credit becomes very advantageous, since the borrower offers a good for the institution in exchange for lower interest rates.
Getting credit with more affordable value is possible through secured loan
The guarantee facilitates the negotiation between client and institution, as the client has longer terms to pay the debt and in case of default, can use the good to take it off, as a result, this reduces the risks of the financial institution.
The well-used guarantee is varied, it may be a vehicle, property, jewelry, etc. The purpose of this type of loan is precisely to seal the commitment of the client with the institution, so that the offered good is made to fulfill such agreement, at the risk of losing it.
Property and vehicle as collateral
Loan with property guarantee
Loan with secured property or refinancing property has the line of credit with the lowest interest rates.
The amount requested is associated with the value of the property, which will be analyzed by a specialist who will stipulate the value.
This process is usually time consuming and cautious, since the institution does not want to suffer losses.
Still with the property under guarantee it is necessary to prove the income in order to prove the competence to pay the installments of the loan.
- Do I need to declare my loan on income tax?
Loan with vehicle guarantee
The loan with vehicle guarantee or vehicle refinancing, presents a little higher interest in comparison to the guarantee of property.
- Questions You Should Ask Before Financing a Vehicle
Payments and interest rates are defined based on the conditions of the vehicle as well as the profile of the borrower. Take into account the year of the model and its conservation, for example.
In addition to providing lower interest rates, paperwork is less bureaucratic than in the real estate operation, and thus, it takes a shorter period to get the requested amount in hand.
It should be emphasized that the automobile must be in the name of the borrower, remaining alienated to the institution until the end of the debt.
The customer may continue to use his vehicle and even sell it, however, in case of sale, the amount must be used for the payment of the debt.
If the debt is not paid, the institution can sell the vehicle at auction to clear the outstanding balance.