A Secured Car Loan and How it Works

February 12th, 2019 by

Man with car key outsideBefore you sign up for a secured car loan, remember to do your research before you sign on the dotted line. At Jeffrey Honda, we are here to explain how secured car loans work. Learn more about this loan then apply for financing through our finance center to explore your financing options and get the right loan for your budget.

How Does a Secured Car Loan Work?

First we have to answer the question: what is a secured auto loan? Secured car loans use collateral, usually the car itself, as security. Because of this, the car can be repossessed by the loaner if payments are not made. To obtain a secured car loan, you must contact our finance department to begin the application process. Is a car loan a secured car loan? Not always. There is more than one type of car loan.

Once the paperwork is started, you’ll need to provide personal information such as your name, social security number, and information on your current financial situation. A credit check will be necessary in order to be approved. Seeing your credit history combined with your income will help the decision to approve your application as you meet the loan terms as well as to decide your interest rates. Once your debt-to-income ratio is determined, and if you meet the loan qualifications, you’ll be presented with the fixed rates of your loan.

You are then able to buy the vehicle of your choice and must make regular payments on the car until the loan is fully paid off. After the loan is paid in its entirety, the vehicle is all yours. If the car is not paid off, and payments stop, the vehicle will be repossessed.

Get Your Loan at Jeffrey Honda!

If you meet the secured loan criteria, feel free to apply at our Jeffrey Honda finance center! Make the trip in from St. Clair Shores to learn more about what our dealership has to offer in terms of car financing. Contact us today for more information.

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