For more than 3,000 years, human beings have used goods – and sometimes work – as collateral for a financial loan. In fact, the word pion comes from Latin pannum or clothing, which was the most widespread form of guarantee in fifteenth-century Europe.
Today, most lenders will not accept your best equipment as collateral for a loan, but other valuable assets can often be used to secure a loan. Although auto and home loans are traditionally secured, some personal loans may also be easier to obtain when the borrower provides an adequate guarantee.
Personal loans are individual loans that can be used for various purposes, unlike auto or home loans, which must be used to purchase these specific products.
Personal loans with so varied goals, all personal loans will not be used to buy something with a guarantee value. As a result, secured or collateral personal loans are among the most seldom offered, as many large banks do not offer them at all.
On the upside, you may not really need collateral to get a personal loan, depending on the size of the loan and your credit profile. Smaller personal loans with shorter durations may be available even for those with poor credit.
Personal loans with guarantee
There are two main types of collateral that can be used as collateral for personal loans: vehicles and savings accounts.
Some lenders will accept the vehicles as collateral if you have sufficient capital and want to put the title as collateral. A handful of banks will also accept a savings account or CD (certificate of deposit) as collateral for personal loans.
Remember that anything you give as collateral for a loan is likely to foreclose if you are in default. Carefully read the terms of your loan agreement – before you sign it – to be sure of the conditions that will lead to a default and seizure of the guarantee.
1. Astro Financial
Astro Financial specializes in consumer loans and personal loans. The company has made loans to more than 10 million borrowers since 1912.
While your credit profile and earnings continue to play a role in determining your approval, Astro typically accepts various types of vehicles as collateral for personal loans.
Acceptable types of vehicles under warranty include cars, trucks, motorcycles, boats, caravans and RVs.
The guarantee used for a Astro loan must be evaluated to ensure its value. In addition, all vehicles used as collateral must be insured against physical damage for the duration of the loan.
Cargow has been part of the American landscape since the mid-nineteenth century, when the company transported people and goods in stagecoaches to the west. Today, Cargow provides a variety of banking services, including chequing and savings accounts, as well as several types of loans.
Although the use of warranties may not increase your chances of being approved, you may use a savings account or a CD account as collateral to reduce your APR for a secured line of credit or personal loan from Cargow. The account must be with Cargow to qualify.
The amount you will use as collateral will determine the amount of your loan, with loan amounts ranging from € 3,000 to € 250,000. Your savings or CD account will continue to earn interest normally when you repay your loan.
3. Dumpling Finance
Dumpling Finance is a financial technology company founded in 2015. Dumpling Finance specializes in lines of credit on automotive value (CELOC) and also offers a prepaid card.
Dumpling Finance equity loans use the equity of your car as collateral. Borrowers can obtain financing from Dumpling Finance, regardless of their credit, provided they meet the criteria. To be considered as a warranty, the vehicle must be in your name and you must be the owner of your vehicle without privilege.
The equity in the car must be sufficient to cover the amount of the loan requested and you will have to subscribe to an all risks and prepaid collision insurance for the duration of the loan. Applicants currently in bankruptcy proceedings will not be eligible.
Unsecured personal loans
Before assuming that you need any collateral to get a loan, it might be worth exploring unsecured personal loan options. Although people with low credit may have more difficulty qualifying for unsecured personal loans, various lenders may still be willing to try their luck.
One of the easiest ways to simultaneously search for quotes from multiple lenders is to use an online loan network. These networks connect borrowers with lenders across the country, which increases the chances of finding a lender who will work with you (and your credit). Our expert choices for personal loan networks are presented below.