An auto equity loan allows you to borrow money by leveraging the equity in your vehicle. Essentially, it’s the difference between the value of your car and the amount you still owe on any existing auto loans. <\/p>\n\n\n\n
This type of loan is secured<\/a>, meaning your car acts as collateral, which often results in more favorable loan terms compared to unsecured<\/a> borrowing options.<\/p>\n\n\n\n If your car has a market value of $15,000 and you still owe $10,000 on it, the equity in your car is $5,000 (the car’s value minus what you owe).<\/p>\n Depending on the lender’s policy, you may be able to borrow up to 125% of this equity amount. So, in this case, you could potentially get an auto equity loan of up to $6,250 (125% of $5,000).<\/p> \n\t Compare Lenders <\/a>\n\t<\/p><\/div>\n\n\n Utilizing an auto equity loan can be a strategic financial move under the right circumstances. It’s typically suited for those who need immediate access to funds and have substantial equity in their vehicle. Here are some scenarios where an auto equity loan might be advantageous:<\/p>\n\n\n\nHere’s how it works:<\/h4>\n\n\n\n
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For Example:<\/h3>
When is an Auto Equity Loan a Good Choice?<\/h2>\n\n\n\n
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