The secured loan is a great option for those who need money and looking for lower interest rates and longer payment terms. As in this option it is possible to place a property or vehicle as collateral for the loan, it is easier to improve payment terms for the consumer.
We have separated 10 truths about the secured loan that you need to understand this new modality.
In the secured loan, it is necessary to place an asset as collateral
The guaranteed loan works like this: if the customer has a property or vehicle in his name, it is possible to place it as collateral for the loan. Thus, the asset will be sold to the financial institution offering the loan. This is advantageous for the company because it reduces the risk of non-discharge and at the same time allows to offer better payment terms for the consumer.
Thus, to apply for a secured loan, the customer contacts the credit institution that will carry out a financial analysis to find out the profile of those who are applying for the credit. If everything is right, the asset that the customer wants to place as collateral, be it a property or a vehicle, is placed in the loan agreement.
As the company has a guarantee for a good, the risks are less, since if the customer does not pay the loan, the good can be sold. This allows the company to be able to offer lower interest rates and longer terms.
When placing a vehicle as a guarantee, the asset will not be in the name of the company offering the credit
In the secured loan your asset will not be placed in the name of the company, it will only be sold to the institution that offered the credit, however it will remain in the client’s name.
An alienated asset means that the indirect possession remains with the credit company that provided the loan, but the owner of the asset remains the customer, so much so that he can continue to use his property or vehicle normally. In this way, as soon as the loan is repaid, the sale will be removed from the document and the link with the credit institution ends.
You do not lose the good if you delay a installment
Rest assured, in case you forget to pay a portion your property will not be taken. Before considering the non-payment of a portion as default, the company contacts the customer to negotiate the payment and understand the reason for the default.
Default usually starts to be considered default after the third installment in arrears. If this happens, the company itself contacts the consumer to notify the default and begins a negotiation process to try to solve the problem.
Your good will be taken as a last resort, in most cases the institutions try their best to solve the installments in arrears with the consumer.
Secured loans do not require advance payment
It is important to know that in any type of loan, payment in advance is not necessary, in the company that offers credit should request payment in advance to the consumer, this practice is illegal and is considered a fraudulent operation.
The loan is made through a consumer request that will undergo a financial assessment and after the entire process, if approved, the request will be formalized in a contract that the customer receives. Only after the loan is signed will it be released, thus, the payment of the installments begins only after receiving the credit.
Even with a secured loan you need to prove income
Even if the customer opts for a secured loan, he must prove income. Credit companies need to know that the customer is able to afford the loan installments, avoiding default.
In addition, credit analysis is also essential for the institution to be able to decide what the loan amount will be, the interest rates and the payment term. Thus, the better your credit analysis, the greater the chances of getting a higher and better loan.
The history of consumption in the market influences the approval of the loan
Another fact that greatly influences companies when deciding the amount of credit to be released, is the consumer’s history of market consumption. It is very common for people to find out when applying for a loan that they are negative in the market.
Therefore, it is necessary to follow the history over the years, always update your registration and pay off debts. The information released is very important and has great weight for credit institutions, as it indicates when a person is in default or negative.
The loan with property guarantee can take longer than the car loan
It is possible to use your property or vehicle as collateral in a loan, however the property collateral modality may take longer to be granted. This is because the procedures involving the properties are more complex and time consuming than those for vehicles.
In the case of a loan with a vehicle guarantee, everything is faster as soon after the credit analysis has been approved, the vehicle documents are requested and the inspection is carried out. With everything approved the loan is released.
However, with real estate the process is a little more complex because it requires a legal pre-analysis, property evaluation, documentation and registration, among others. Only after all this process will the contract be sent to the notary for authentication and the credit will be released.
The asset used as collateral must be paid in order to be part of the loan.
In order to place the asset as collateral in the loan, it must be paid off. However, if you do not have a good paid it is possible that the company will pay the good for you.
This is called a quotas intervenient, which is when the consumer wants to use as collateral an asset already sold in another company. In this case, the institution settles the remaining amount and deducts that part from the total credit granted.
It is possible to get the loan by placing a guarantor
Guarantor is the person who is responsible for paying a foreign exchange security, so companies accept loan applications with a guarantor. However, the person must have a first-degree relationship (father, mother or spouse) with the consumer of the loan and must accept responsibility for paying the installments.
You will only lose the good in case of default
The good can be taken in case of default, however this is something that the institutions try their best to avoid since the execution of a good is not something fast or even simple. For this reason, the company considers default from the third installment in arrears and will try its best to negotiate the debt and the form of payment before entering the execution process. The good will only be taken if it is not possible to reach an agreement and after all attempts to negotiate payment are over.
Now that you know everything about secured loans, how about knowing the possibilities that lender offers? We have been in the market for over 20 years, always working with safety, quality and trust. Make your loan simulation here.