A secured loan is one in which the borrower offers up an asset as collateral for the loan. The asset may be a car or a house, for example, which then becomes a secured debt owed to the creditor. Not all secured loans are alike, however. One of the more popular secured loans is one in which a home is used as collateral.
Many people have used a home equity loan or second mortgage as a means for making improvements to a home, paying for their kids’ college education, or even paying for unexpected emergencies. Whatever the reasoning, these types of loans are normally processed by a financial institution such as a bank or credit union or through a private mortgage broker.
A home equity loan is, in most cases, a second mortgage on a home. Most homeowners borrowed to pay for the home in the first place. The second mortgage is much like the first. It will take several weeks to process because it is based largely on credit history, income, and current levels of debt. The financial institution will take a great deal of time to make sure that the borrower has the necessary means to pay back the loan. Like any secured loan, if the borrower fails to repay, the lender can take possession of the property. The lender would then attempt to auction the home in an attempt to recover its losses.
Another type of secured loan is a car title loan. Auto title loans are secured by a vehicle. The owner of the vehicle must own the vehicle outright and have a clear title. In some cases, cars that are almost completely paid for can be used as collateral.
A car title loan is processed much faster than a home equity loan. Title loan companies, like Embassy Car Title Loans of Florida, do not have to take the time to do lengthy credit checks or examine other debts held by a borrower. As a result, the processing time for a vehicle title loan is much faster than that of a second mortgage. In most cases, a car title loan is processed and the funds are transferred to the borrower within minutes of completing an application.
The term of the car title loan is much shorter than the average second mortgage. Just like a home equity loan, when a person defaults on the loan the title loan company can take possession of the vehicle. For those needing access to emergency funds very quickly, the car title loan is a great option.