When it comes to financial need, you might often seek different options for obtaining loans and credit; one such option that you can check out is a car pledge.
A car pledge (รับจํานํารถ, which is the term in Thai), is basically a secured loan where you use your vehicle as collateral to obtain funds from the lender. When you go for this option, you need to temporarily transfer the ownership of the vehicle title to the lender in exchange for the loan amount. Once your loan is repaid, including your interest and fees, the lender will return the title to you.
How Does The Car Pledge Work?
To get the car pledge, you need to own a vehicle outright, meaning there must be no outstanding loans against it. You have to bring the vehicle along with the title to the lender for inspection. After agreeing to the loan terms, you need to provide the lender with the vehicle title and receive the loan funds. You have the position of the vehicle, and you can continue to use it as usual during your loan term. But the lender will become the legal owner of your vehicle title until you repay the loan completely.
Benefits Of Car Pledge
Car pledge loans are relatively easy to obtain as compared to typical bank loans. They require minimum documentation and credit checks, making them your best bet if you have poor credit or financial challenges. The car pledge loans offer quick approval and disbursement of funds, allowing you to obtain cash swiftly in times of urgent financial need.
As the collateral secures car pledge loans, you do not have to worry about the impact on your credit score or require any credit history check. You can retain possession and use the vehicle outright Throughout the long term, allowing you to maintain your mobility and daily routines.
Risks And Considerations
You need to know that car pledge loans often come with a high-interest rate and fees. It can lead to major costs with time if your loan is not repaid in time. Due to the high cost and short repayment of car pledge loans, you might find yourself trapped in a vehicle of debt if you are unable to repay it.
So, you need to know that the car pledge can provide a quick and accessible source of funds for you if you’re facing financial emergencies or cash flow challenges, but you need to consider the risks and costs linked with this type of loan before you proceed ahead.
