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What is a Secured Car Loan & How Does it Work?

While shopping for a new or pre-owned vehicle in the Warner Robins area, you may be wondering: What is a secured auto loan and how does it work? A secured car loan is a popular financing option where the car you're purchasing serves as collateral. This type of loan generally offers lower interest rates because it’s considered less risky for the lender. In this guide, we'll explore how a secured car loan works, the secured loan criteria, and how you can get started with financing at Genesis of Macon.

How Does a Secured Car Loan Work?

First, we have to answer the question: What is a secured auto loan? It’s a loan that uses collateral, usually the car itself, as security. This means the car can be repossessed by the loaner if payments stop. In order to obtain one, you’ll first need to contact our finance department to start the application process. You might also be wondering: is a car loan a secured car loan? Not necessarily. There are different kinds of car loans to choose from.

 

Once the paperwork is started, you’ll need to provide personal information such as your name, social security number, and information on your current financial situation. A credit check will be necessary in order to be approved. Seeing your credit history combined with your income will help the decision to approve your application as you meet the loan terms as well as to decide your interest rates. Once your debt-to-income ratio is determined, and if you meet the loan qualifications, you’ll be presented with the fixed rates of your loan.

 

You can then purchase the vehicle of your choosing and must make regular payments on the vehicle until the loan is paid in its entirety. After the loan is paid off, you’ll own the vehicle outright and you can sell it to our dealership near Dublin. If the car is not paid off, and payments stop, the vehicle will be repossessed.

Apply for a Loan at Genesis of Macon

Now that you know the answer to, “Is a car loan a secured loan?” and “How does a secured car loan work?” you may be ready to move forward. When you visit us in the Hawkinsville area, we’ll walk you through the application process and help you secure the right loan for your budget and lifestyle in Perry. Contact us today to learn more about our financing options or schedule a test drive to find the perfect vehicle for you.

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