After months of lockdown, many individuals have lost their jobs. Others have not been able to operate their businesses at full capacity. Many more had to take salary cuts. As a result of the economic difficulties, thousands of South Africans have missed credit payments and are now struggling to catch up on their payments. All hope is not lost. Even people who are not employed or who have poor credit records can benefit from vehicle collateral loans.
How does it work?
With collateral loans, assets are put up as security for the amounts to be borrowed. The assets are placed in safe storage until the amounts have been repaid. The process is as straightforward as a normal pawn transaction.
Several benefits are associated with the solution, some of which are briefly noted below.
No credit checks
When consumers want to borrow money from a bank or a micro-lending company, they have to go through credit checks. Unfortunately, the slow economy before the lockdown and the consequences of trade limitations have caused many to default on payments. Their credit records are not without blemish. As such, they cannot access much-needed cash for emergencies, to rebuild their lives, or to start a business. With the collateral solution, people with poor credit records can also borrow money, as no credit checks are performed.
Short application process
Banks often take a few days to approve applications to borrow money. Business opportunities pass while the applicants wait. Sometimes, waiting for approval can mean losing an asset in the process or not being able to pay a deposit on a house. With loans against assets, the application processes are quick. Applications can be completed and approved within 30 minutes. The money can be paid into the applicant’s bank immediately after approval
Safe storage of the asset
As with pawn transactions, the vehicle is placed in safe storage for the duration of the loan repayment period. The vehicle, such as a car, boat, motorcycle, truck, caravan, or boat is not used for the entire period. It is insured, and the applicant can also insure it. The storage facility is secure and includes camera surveillance, 24/7 access control, and electric perimeter fencing. The asset is protected against environmental factors, theft, and vandalism. Because it is not in use during the repayment period, it does not lose value in terms of wear and tear.
Amount based on asset value
With the solution, the amounts that can be borrowed are determined by the assessed value of the assets and not the income of the applicants. Why is it important? The applicants do not have to complete income and expense sheets and do not need to prove that they can afford the repayments. They do not need proof of residence or a monthly income or have to meet affordability criteria. Finally, they do not have to disclose why they need the money.
The solution makes it possible to access cash when needed. Complete the online enquiry form for more information on vehicle collateral loans as available through us.