Thinking of pawning your car to get some quick cash? Car pledge loans, also known as auto title loans, allow you to use your car as collateral to secure a loan. Here’s what you need to know about how car pledging works and when it might make sense to pledge your car.
What Is A Car Pledge Loan?
A car pledge loan is a type of secured loan where you put up your car’s title as collateral in exchange for cash. Throughout the loan period, the title will be retained by the lender. If you default on the loan, the lender can repossess and sell your car to recoup their money. The amount you can borrow usually depends on your car’s resale value.
How Do Car Pledge Loans Work?
Getting a car title loan is a pretty straightforward process. You’ll drive your car to a title loan store or contact a pawning service provider of car pledge Samut Prakan (รับจำนำรถ สมุทรปราการ, which is the term in Thai) and provide documents that prove your ownership, identity, and income. There are currently dozens of them, with a few being the most well-known.
If approved, you’ll provide the title as collateral and sign loan documents. You can then take your cash and keep driving your car — at least until the loan is due. Be sure to clarify the full payment schedule so you know when the entire balance and fees are due.
Why Get A Car Pledge Loan?
People most often pledge their cars when they need fast cash but have poor credit or limited options. Situations where you might consider pawning your car title include:
- Covering bills when paychecks are short
- Avoiding costly late fees or service interruptions
- Paying for emergency expenses like medical bills
- Making a large necessary purchase for your household
Keep in mind that taking out a car title loan is your only option in these situations. You may be able to get cash from friends or family, take out a small personal loan from your bank, or use a low-rate credit card. However, over all options deciding over a car pledge loan makes sense. Since few companies offer low-interest rates of 1.25% per month.
Before you pawn your car title, think carefully about whether you can realistically pay back the full balance plus steep interest charges by the loan due date. If those repayment terms seem risky, explore other lower-cost borrowing options first. No short-term cash infusion is worth losing your primary mode of transportation and freedom.
