Borrowing against an asset is the best way to aid your financial needs fast. In Utah, secured loans are left and right, and the state arguably gives consumers more options to seek financing than any other part of the country.
Sure, you do not have to pledge anything you own if you wish to borrow cash. However, giving a lender some repayment assurance can help you access more money to get a more favorable interest rate despite having poor or fair credit.
There is no denying, though, that Salt Lake City title loans and Sandy mortgage refinances are inherently risky. That is why you must use an acceptable type of collateral to obtain sufficient funds and avoid ruining your life in case you fail to repay all of what you owe.
To choose the best security for your loan, think about the following:
It Has Value
Do not think of value as an abstract idea. When narrowing down your collateral options, keeping in mind that valuable security is something a lender can resell with ease for a good amount of cash. Not everything that matters to you or that you acquired by paying a premium automatically qualifies as good collateral.
A prime example of “valuable” security is a mechanically unsound vintage car. You can find someone or some company willing to accept it, but you are likely not going to find takers quickly.
Unless you can appraise your asset accurately yourself, let a professional evaluate your possession to know its market price with more accuracy. Your knowledge of your collateral’s value makes a useful bargaining chip in your negotiation with your prospective lender. If the other party knows more about your asset’s worth than you do, you are mostly at a disadvantage.
Furthermore, some assets become valuable not because of what they are made of but rather because of what they stand for. Historical items and collectibles are an excellent case in point. Dig out some of your forgotten inheritances, for you might find gold in your storage of clutter.
You Do Not Owe Anything on It
Except for pieces of real estate, you are generally not allowed to borrow against an asset that has an existing lien on it. Otherwise, two creditors would have the right to claim it in case you default on your loan.
You might try to trick a lender into believing that you fully own the asset you are attempting to use loan security, but advanced technology would uncover the truth. Doing this can even constitute fraud, and you might not get away with it forever.
Urgent financial needs is not an excuse to use some other loan’s collateral to take out another loan. If you are considering to use an heirloom, make sure its papers, if there is any, are clear.
You Can Live without It
The perfect collateral is something you do not need. You should consider selling it rather than using it to secure a loan. The problem is that a willing lender is easier to find than a serious buyer.
It can be changing to find an asset the fits the bill. Nevertheless, it should be your goal if you are to minimize the high risk of taking out a secured loan.