A car pledge is a car title loan or autobahn. It is a type of secured loan where you can use your vehicle as collateral to obtain a loan from a lender. The financial arrangement is perfect for you if you need instant funds and you are also willing to pledge your car as a security. In this guide, you can understand the concept of Car pledge (รับจํานํารถ, which is also a term in Thai).
How Does The Car Pledge Work?
Whenever you pledge your car, you provide a lender with the title of your vehicle as collateral for the loan. The lender will then understand the value of your car and also offer a loan amount based on the percentage of its value appraised. You have to agree to repay the loan within a specific timeline with interest and retain possession of your vehicle during the repayment term. But if you fail to repay the loan as per the agreed terms, the lender has all the rights to take possession of your car and sell it to recover the outstanding amount.
Pros And Cons Of Car Pledge
Quick Access To Funds
The best part about car pledges is that you can have quick access to funds without the need for any credit check. It makes your best bet if you need instant financial assistance.
The Risk Of Losing The Vehicle
One of the major risks linked with a car pledge is the potential loss of the vehicle if you do not repay the loan in time. It is very important for you to understand your financial situation before you opt out of this loan.
Flexible Repayment Option
There are several lenders that offer you flexible repayment options. This allows you to choose a repayment plan that suits your financial capabilities. However, you need to understand the terms and conditions of the loan agreement before making any commitments.
The car pledge loans generally come with high interest rates as compared to the typical loans. It can lead to a lot of financial burden for you as a borrower. It is very important for you to carefully evaluate the total cost of the loan, including the interest before you agree to any terms and conditions.
In short, a car pledge can provide you quick access to funds as a borrower, but you need to understand the risks and the liabilities linked to it. You need to understand your financial capabilities and the terms of the loan.