If you own your car outright, you could use it as collateral.
If you have a car loan, you might have enough equity.
If you have enough equity, you may be able to use your car as collateral to get the loan you want, though you should check with your lender to make sure the loan terms will allow it.
What happens when you use your car as collateral for a loan?
Collateral is something that can guarantee the loan, creating for the lender a secured interest in property. If you happen to default on the loan by failing to make payments, the lender will have the right to repossess the collateral through a specific legal process.
Can I get a loan against my car?
To borrow against your vehicle, you need to have enough equity in your car to fund a loan. In many cases, you need to have paid off any other loans used to purchase the vehicle, but some lenders allow you to borrow if you’re still paying off a standard auto purchase loan.
What is a collateral loan?
Collateral is an asset that a lender accepts as security for a loan. If the borrower defaults on the loan payments, the lender can seize the collateral and resell it to recoup the losses.