What is a Secured Auto Loan?

If you’re looking for a high-quality, affordable new vehicle in the Columbia area, you’ve come to the right place! At Sharp Chrysler Dodge Jeep RAM, we offer a full lineup of vehicles from Chrysler, Jeep, Dodge, and RAM in our inventory, ranging from two-door sports cars to full-size family SUVs and everything in between. As you shop for your next ride, one of the first questions you should ask yourself is whether you want to buy or lease your vehicle. If you want to buy it, you’ll generally want to go the route of financing it via a secured auto loan. What is a secured auto loan, and is a car loan a secured loan? The finance team at Sharp Chrysler Dodge Jeep RAM has everything you need to know in the guide below–check it out!

How Does a Secured Car Loan Work?

In short, the answer to the question. “Is a car loan a secured loan?”, is yes. And just what is a secured auto loan? A secured loan simply means that you put something up as collateral, which the lender can repossess if you fail to make your required payments. When it comes to secured car loans, the collateral is just that: the car. A secured auto loan means that the lender can repossess the vehicle you’re financing if you don’t make the payments set out in your loan agreement. While it’s not impossible to find an unsecured auto loan that doesn’t use collateral, it’s extremely rare. Secured auto loans help reduce the risk factor for lenders, which makes it easier for them to lend to people with poor credit scores. They also tend to come with less interest than unsecured loans, which means you won’t be paying as much each month.

Secured Loan Criteria 

The process of securing a loan for a vehicle in the Lawerenceburg area is relatively simple. You’ll need to provide the following:

• Credit score (the better your credit score, the more likely you’ll get a loan, though it’s still possible to get a loan with a poor credit score)
• Proof of employment
• Proof of residency
• Income statement

You’ll also need enough money to make a down payment. The bigger the down payment, the less you’ll be paying each month, which means lower interest and better loan terms. The length of a loan term usually starts at 36 monthsand goes up from there, sometimes as long as 96 months (8 years). 

Keep Up with Sharp Chrysler Dodge Jeep RAM for More Finance Tips!

What is a secured auto loan? If you have any questions about secured loan criteria or anything else we’ve discussed above, feel free to contact our finance center! You can also stop by our dealership to talk to a member of our team in person; we’re conveniently located near Lewisburg and happy to help. If you’re ready to get started on the financing process, the first step is to get pre-approved, which you can do right from our website.