At some stage in life, most Australians will need to take out finance to cover an emergency, buy a car, go on a holiday and a whole host of other reasons.
Australia has many lenders offering a variety of loans and finance solutions to cover every need. If you’re not looking to buy a home, apply for a credit card or sign up for a Personal Loan, you might find that a Pawn Loan from a private lender is more appealing and suits your needs better.
In this article, we’ll take a closer look at the Car Pawn Loan, what it is, why you would want one and where you can get one.
What Is a Car Pawn Loan?
A Car Pawn Loan is a form of finance where you put up your car as security against the loan. Because you’re leaving your vehicle with the lender, there is far less risk for them to loan you money. You borrow a certain amount based on the value of your car and when you repay the loan in full, your car is returned to you in the same condition that you left it.
To safeguard the lender, if you fail to repay your Pawn Loan, the lender will then have the right to keep your car and sell it to retrieve the borrowed funds.
It’s an easy, no-fuss type of loan that virtually anyone with a car can access and because Pawn Loans are secured finance, there is a far greater chance of loan approval.
How Much Can I Borrow?
With a Car Pawn Loan you can borrow anywhere from $2,000 up to $500,000 depending on your vehicle, its value and providing there is no finance owing on it. Vehicle Pawn Loans offer one of the most diverse and generous borrowing ranges of any loan type.
Let’s look at the way your borrowing power is worked out.
First, your vehicle will undergo an evaluation to determine its current market value. Then, as a general rule, you’ll be offered a loan of up to 60% of that market value. As a simple example, if your car is deemed to be worth $100K, you can get a Pawn Loan against it to the maximum value of $60K.
You may not need or want that much, but you’ll have the option of borrowing anywhere from $2,000 up to $60,000 in this example. Keep in mind that the less you borrow, the easier it’ll be to repay the loan.
How Can I Apply for a Car Pawn Loan?
The first step is to bring your car down to the lender’s premises so a staff member can take a look at it and determine its current market value. Once that’s been established a loan amount can be negotiated based on the value of your car.
Some criteria that needs to be noted before applying for a Car Pawn Loan:
- Your vehicle needs to be less than 10 years old and have no more than 150,000km on it
- There cannot be any finance still owing on the car
- You need to be able to produce the registration papers of your vehicle
- Provide enough identification to total at least 100 points of ID
- You must agree to leave your car with the lender until you’ve repaid the loan in full. Then it will be returned to you
If you meet all the criteria and you and the lender have agreed on a loan amount, then a contract can be signed and you’ll likely receive your money in your account on that same day. At the latest, it’ll be the next business day.
If you have any questions, just talk to the lender first so you fully understand the requirements and how it works.
What If I Have Bad Credit?
One of the key reasons you might be considering a Pawn Loan instead of applying for a Personal Loan is because you either have a bad credit record or no credit history at all.
With most forms of finance, your application will undergo a credit history check to see whether it’ll be a risk lending money to you. If your credit score is poor, there’s a high chance your application for finance will be declined.
It’s a different scenario when you approach a private lender for a Car Pawn Loan. As has already been mentioned, because you’re leaving your car as collateral in their possession, there is far less risk attached to the loan. Therefore, it’s not necessary to perform any credit checks that could make or break the decision on your loan.
It’s about having the peace of mind that you can get the money you need no matter what your credit history says.
Can I Get a Car Pawn Loan Without a Job?
The simple answer is, yes.
And for the same reasons you don’t need a perfect credit score to be approved for a Pawn Loan. Your vehicle is security against the loan.
Having said that, if you are out of work and you do decide to get a loan against the value of your car, if you want your car back, you’ll need to have a plan as to how you’re going to repay the debt on time so you don’t lose your car.
After all, there’s no point getting the loan if you don’t have the means to repay it, so it’s wise to have a plan first.
Where Can I Get Car Pawn Loans?
If you are looking for Car Pawn Loans in Sydney, look no further than Cashify. We are your local lending specialists for Car Pawn Loans and other Pawn Loans and instant cash Personal Loans. Cashify offers transparent and very competitive rates, along with fast service to ensure you get the cash you need, when you need it.
Give us a call today on 1300 933 053 and talk to us about how a Car Pawn Loan can help you.
Disclaimer: Please note this content is of general nature only and does not take into account your personal objectives, financial situations or needs. For advice tailored to your financial situation, it is advised that you seek guidance from an accountant or financial advisor. The information contained in this article is correct at the date of publication.