One of the best ways to get money to cover emergency expenses is to apply for a loan against car papers South Africa. This is a form of secured loan that offers same-day approval. You also get competitive interest rates and a flexible loan repayment period.
It has become increasingly difficult to get a loan nowadays. One of the most significant challenges lenders face is that borrowers are failing to pay back. As such, the loan approval process is now tighter.
What is a Loan Against Car Papers South Africa?
This is a secured loan based on the embedded value of your vehicle, boat, or motorbike. Please note that you can only use a fully paid car to take this kind of loan, and the car should be in your name.
You can think of this as pawning your vehicle. Many people take these kinds of asset-based loans on a daily basis to cover different business and personal expenses.
Have you taken a loan from Cash Crusaders before? If so, then you are probably familiar with the process of asset-secured loans already.
Why Pawn a Vehicle in South Africa?
You may be considering a loan against your vehicle for many reasons. Perhaps you are dealing with an emergency, want to pay bills, or buy food.
Well, these are all valid reasons. But why take a loan against your car when there are other types of loans? The answer is simple. This loan is super easy to get, it has fewer requirements, you get fast approval, and it’s popular among bad credit borrowers.
Getting a regular loan from a bank or any other registered lender can be difficult when you have a poor credit score. As such, your only option would be to get a loan against car papers South Africa.
What if You Just Sell Your Vehicle?
Instead of taking a loan against my car, why can’t I just sell it? That’s a valid question. But selling a car is permanent and taking a loan against it is only temporary.
In most instances, financial troubles are only short-term. This means you will be able to recover at some point. As such, it’s best to opt for a temporary solution, which in this case, is pawning your vehicle. Once your finances are better, you can pay back the money and get your car back, instead of losing it forever.
The Downside of Selling Your Vehicle
What if you skip getting a loan against car papers South Africa and sell your car? Well, if you try to sell your car to cover an emergency, there is a very high chance that you will get a price that’s well below its value.
This is because you will be in a hurry and won’t have time to find someone who appreciates it enough to pay for what it’s worth.
Apart from not getting a price that reflects your vehicle’s true value, you won’t have that asset you worked hard for anymore. You bought the car and paid it off in the first place so you can enjoy it. That won’t be possible if you sell it. You basically lose it forever.
Why a Loan Against Your Car Makes So Much More Sense
If you take a loan against your car, you will have the money within an hour of applying and the car will still be yours. Your lender will put it in storage until you manage to pay the full amount you borrowed.
Regular short-term loans are available to lenders with good credit scores and proof of income. Fortunately, when you borrow against your vehicle, the lender doesn’t need that. You also don’t need to explain why you need the money.
Who is Eligible for a Car Papers Loan?
- Individuals who own a fully paid-up car
- Holder of a valid South African ID
- Licensed drivers who own vehicles
- You have to be over the age of 18
How Does the Process of LoanS Against My Car Work?
Are you thinking of getting a loan against car papers South Africa? Here are the simple steps:
- Find a reputable lender
- Take your car and the title to the lender
- The car has to be in your name
- You need to provide a valid South African ID and Traffic Register
- The lender will ask for original RC1 car ownership papers and vehicle registration documents
- Some lenders also need recent proof of address
- Present your valid South African driver’s license
- The lender will assess the current market value of the car
- You will get a loan offer and loan agreement documents
- Upon approval, the lender will put the car and title in storage
Once the loan is approved, the lender will give you the agreed-upon amount. You can then use this money to cover any expenses you have. The lender will return your car and title once you repay the loan.
Benefits of Taking a Loan Against Car Papers South Africa
Here are the benefits of taking a loan against your car.
- You can get the loan and quickly repay the amount to recover your vehicle
- Reasonable interest rates and a flexible loan repayment period
- You can get a car papers loan even if you are not employed
- The loan approval process is fast, and you can get cash within an hour
- Lenders who provide this service are registered, and they operate fairly;
- It’s a great way to get money if you run a business and are waiting for your payments.
How to Find a Reputable Lender
You should look for reviews online to find a reputable lender for a loan against car papers South Africa. That will give you a clear picture of how a particular lender operates. Is anyone complaining about being scammed by the lender? If so, you should find another business with a better reputation.
Keep in mind that not every lender in South Africa is credible. There are many horror stories of unsuspecting borrowers who fail to get their cars back even after paying their loan amounts in full.
This is why it’s crucial to only work with registered and accredited loan providers.
Lenders Offering Loans Against Car Papers in South Africa
One of the most credible providers of asset-based loans in South Africa is Xcelsior Finance. This privately owned lender provides professional and ethical services and loan packages.
You can also get a loan against your vehicle from Pawn My Car. This is a finance company that specializes in same-day vehicle-backed loans.
These two lenders have branches in Cape Town, Johannesburg, Port Elizabeth, and Durban.
Can I Borrow Money Against My Car and Still Drive it?
Yes. You can get a loan against your car and still drive it. However, applying for such a loan against car papers in South Africa is not recommended.
Services that let you drive your car and loan against are usually predatory, with super-high interest rates. As a result, you may find it very difficult to repay the money, and most people lose their vehicles as a result.
How Do Loans Against Car Papers Compare to Other Short-Term Loans?
Loans against car papers are easy to access. No credit checks are required, and you don’t need proof of income. This means almost everyone in South Africa who owns a fully paid-up vehicle can qualify for this loan.
The car papers loan is an asset-based financial product. The lender reduces risk by placing your vehicle in storage.
You don’t need to present recent bank statements or proof of employment. Lenders only require these documents to carry out affordability assessments.
A loan against car papers South Africa will be approved on the same day. The interest rates are affordable, and the repayment period is flexible. Also, clients will not be penalized for early settlement.
One of the most significant advantages of this loan is that it’s confidential. Loan against vehicle papers lenders don’t share your information with third parties. As a result, the loan won’t appear on your credit record.
Things to Consider Before You Apply for Loans Against Your Car
A loan against your vehicle is only as good as the lender you are working with. If the lender doesn’t have physical branches and isn’t registered with the National Credit Regulator, many things can go wrong.
The devil is in the details when it comes to taking a loan against car papers in South Africa. Before you place your signature on any document, ask about the interest rates and fees. You should also find out what will happen if you fail to repay.
If the loan has high interest rates and fees and the lender doesn’t want to negotiate terms, you should look for a better alternative.
A vehicle is a valuable asset. You should only use it to secure a loan if you know you can pay the money back. If you don’t repay the loan, the lender will sell your car to recoup their losses.
With these things in mind, you must think long and hard before you take a loan against your car.
How to Estimate Your Car’s Value When Taking Out a Loan
The best way to find out how much you are likely to get for your car if you use it as security is to use a loan calculator. But before you enter information into a car loan calculator, you may want to get your car appraised first.
You can visit a car dealership near you and ask how much you can get for your car if you sell it. That will give you a general idea of your car’s current market value. Then, use this information with this loan calculator to get an estimate.
What Documents do I need to Apply for Loans Against My Car?
Before you can reach out to your chosen lender, you should gather these important documents:
- Proof of residence
- Car registration document
- Valid SA driver’s license
- Car Insurance;
- Bank Statement.
Once you have these documents, you can start shopping for loans against your car.
Tips on Shopping for the Best Loan Against Car Papers South Africa
When looking for loans against your car, you must always take time to shop for the best deal. Here are some tips to help you find the best loan product:
- Get quotes from multiple lenders
- Compare fees and interest rates
- Assess the lender’s customer service
- Search the internet for reviews and testimonials;
- Only go for registered and accredited lenders with physical branches.
- Borrowing against your assets is legal and regulated by South African law under the National Credit Act (NCA).
- You can make repayments in full or via monthly statements
- The lender can extend the loan period if you fail to pay the money on time
- The lender can sell your vehicle and pay you the surplus if you don’t pay the loan amount back
- The lender will not drive your car;
- Storage facilities where cars are kept are safe and guarded 24/7.
Do You Need a Loan Against Car Papers in South Africa?
Start your application process here if you are looking for an asset-based loan. You can use this loan to cover medical expenses, emergency home fixes, the cost of repair for another car, school fees, paying bills, and so much more.
Please make sure you have all the required documents before you approach the lender for a loan against car papers South Africa. Also, remember that this option is only available if your car is completely paid up and in your name.
Frequently Asked Questions
What type of cars can I pawn?
You can pawn any car. However, some lenders may not accept a car in poor condition.
Can you get a loan against your vehicle if you are still paying for it?
You won’t be able to get a loan against your vehicle if it’s not fully paid off.
How much money can I get when I pawn my car?
Your loan amount depends on your vehicle and its current market value. The lender will also assess the condition of the car.
How long does it take to get a loan against car papers South Africa?
Getting a loan against your vehicle will take about an hour. You will receive the money within minutes as soon as the loan is approved.
What is a Vehicle/Car Title?
A car title is a document that proves vehicle ownership. It contains the car’s make, model, VIN, and license plate. The document also shows the names and addresses of current and previous owners. In some instances, it also displays how much the car was bought for in the past.
Can I Take a Car Asset-Based Loan With a Bad Credit Score?
Yes, the lender will not check your financial background when you are taking a loan using your vehicle as security. This is why it’s the best option if you have been refused bank loans.