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Why You Need to Choose a Secured Car Loan » Naijaloaded


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Getting a new car is an exciting time for many reasons. First of all, this is a big purchase or decision to make so you want to be sure you’re finding the right vehicle for all of your needs.

Secondly, a car represents freedom so if this is the first time you’re getting one, then you can finally get around easier. And lastly, it’s fun deciding on the vehicle of your choice.

The difficult part is that choosing a car requires a lot of patience, knowledge, and plenty of paperwork. Many people choose to buy their cars outright, but if you don’t have the cash to go this route, t.’s nothing to worry about. Leases and loans are also extremely popular options because buying a car upfront with cash isn’t viable for a lot of us.

Loans, in particular, can help you get driving fast which helps with commuting to work, helps with your business, and improves your movement in general. If you’re thinking about getting a car and need a financing option, then choosing a secure loan is a smart way to do it, so . is some info that will help you understand why it’s a good idea and tips on getting a loan.

Advantages of a Secured Loan

A secured loan is a way of putting up other assets, like a home mortgage, as collateral for your loan so that the lender can trust you.

This helps because they have a backed assurance from you financially so they won’t get burnt when giving you the money to help finance a vehicle.

Secured loans offer some very impressive benefits that prospective car owners should consider. Here are some of those benefits:

Better Interest Rates

Based on the fact that you have collateral backing your loan, the lender will offer lower interest rates for a car loan.

This is an important part of finding a loan, so it’s good to know that with a secured option, you get more preferable rates.

It’s still worth mentioning that you should do your homework on APRs offered and other interest rate qualities for a secured loan to make sure you’re getting the best offer.

Tax-Deductible

Most personal loans are not tax-deductible, but again, because your loan is backed by collateral of assets or a mortgage, you can actually claim this loan on your tax statement.

Not all secured loans allow this, and according to the experts at Plenti it’s best to compare loans to figure out if it is possible.

Still, the potential that you might write it off is enticing.

Lower Income Qualifications

A lot of loans have a requirement of income that the lender must see in a statement before approving the loan and determining the agreement of payment terms and interest rates.

Due to the fact that your loan is secured against collateral, your income qualifications can be lower. If you don’t have a steady income, such as a freelance worker or business owner, then this is a good option.

Better Terms

Knowing you have more freedom in payment terms for repaying the loan can be a sigh of relief for a car owner.

This is a good reason why secured loans have significant advantages compared to other loans. Being able to adjust the payment plan helps with your financial flexibility.

Figure Out Your Credit Score First

Now that you know what the advantages of a secured loan are, you want to start thinking about applying for a loan. The first step that you should figure out, and it’s an easy one, is determining your credit score.

Most banks will allow you to get a credit check now that won’t impact your score for peeking. T. are also third-party financial services that can allow you to check.

Anything over a 700 is considered good, but past 740-750 will open up more options, but a secured loan actually helps you find these loans even if you don’t have an amazing credit score.

Get Quotes From Lenders

You should always compare loans, as mentioned earlier regarding the potential for tax-deductible status, but you want quotes too.

Getting a quote helps you figure out a more precise estimate of the cost of the loan and financing terms.


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When you get this quote, you can do a better job of figuring out how much incidentals and other fees will be.

Use Shorter Loan Periods

The advantage of getting more flexible payment terms with a secured loan is great, but you should also hedge your bet even further ..

Choosing a shorter loan period means you will be paying more monthly, but that’s actually an advantage. This means less time to accrue interest and provides more relief from being bogged down by a longer term of repayment, which is w. people get into debt cycles.

If you can, and with a secured loan it’s a good bet, you should aim for a shorter-term repayment and loan.

Always Put Money Down

If you can, you should put money down on the loan right away. Usually, you’ll want to put down about 20% because it might help cover the cost of what the car is worth.

This is especially useful if you plan on selling the vehicle at some point and don’t want to lose out on any value of it. It also helps when you end up owing more for the loan than the car, which is a situation you’d like to avoid if possible.

Cover Additional Fees With Cash

Lastly, the fees like registration, sales tax, or extra features like roadside assist or warranties should be paid for with cash.

This reduces the amount on your loan without any increase in the value of the car. Always pay these extras with cash to keep your loan secured just for the car.

Besides, those fees are not overly expensive either.

Now that you know a little bit more about a secured car loan, you can see why it might be a more attractive solution for getting your car financed.

This is a good way to ensure that you get the vehicle you want, but you do it in a financially responsible way.

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