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

Before you sign up for a secured car loan, be sure to do your research to see if it’s the right way to go. At Lexus of Palm Beach, we have the information you’re looking for about secured car loans and how they work. Learn more about this loan then apply for financing through our finance center near Palm Beach Gardens to explore your financing options and get the right loan for you.

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. 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 to approve you. 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 you must make regular payments on the vehicle until the loan is paid in its entirety. After the loan is paid off, the vehicle is yours to keep. If the car is not paid off and payments stop, the vehicle will be repossessed.

Get Your Loan at Lexus of Palm Beach!

Once you reach the secured loan criteria, be sure to apply at our Lexus of Palm Beach finance center! Make the trip in from Delray Beach or Lake Worth to learn more about the financing solutions available at our Lexus dealership. Contact us today for more information.