Can You Drive A Car That Has A Loan Against It?

If you’re in need of quick cash but you rely on your car for daily transportation, a loan against your car might be better than selling it. Red Tree Finance offers a convenient way to leverage your vehicle’s value while keeping it on the road.

A loan against a car, referred to as a secured loan, enables you to borrow money by using your vehicle as collateral. Unlike selling your car, this option allows you to continue driving your vehicle while repaying the loan.

A secured loan is a type of cash loan that requires an asset, like a car or a boat, as collateral. This asset is used as security to provide you with the funds you need. If you fail to make payments, the asset will be used to cover the remaining cost of the loan.

The process may require you to determine the value of your car (this may be how much it is insured for). When you take out a loan secured against your car, you retain possession of your car and you will repay the loan through regular instalments.

Remember, if you default on your repayments, the lender may repossess the vehicle. At Red Tree Finance we are committed to responsible lending and make sure only to lend what you can comfortably afford to repay. We also understand that things happen, and if you have trouble meeting repayments you can contact us about Financial Hardship options.

If your car, motorbike or boat forms security for a loan, you will need to ensure it is well-maintained and in good repair. Make sure that you budget for scheduled maintenance according to the vehicle log book, replace tyres and check things like the oil and radiator fluid regularly.

When you use your car as security for a loan you may also need to have comprehensive car insurance in place. This means that if you do have an accident or something happens to your car, you are covered for the value of the vehicle.

1. Quick access to funds
2. Continued use of your car
3. Flexible repayment options

1. Interest rates
2. Risk of repossession if you are unable to keep up with repayments
3. Loan amount limits
4. Comprehensive car insurance
5. Maintenance of the vehicle

If you are in a tricky financial spot and you don’t have a vehicle you can use as collateral for a loan, there are a few things you can do right away to help free up some cash:

1. Sell second-hand household items on online marketplaces can be a quick source of funds.
2. It’s never too late to implement a budget for your household, check out the one we have made to guide you with setting up a budget.
3. There are services to help you through a rough patch which can contribute to housing, bills, food expenses, education and schooling, transport, emotional support and more.
4. No-interest loan schemes (NILS) are another great alternative if you need to make a purchase you are struggling to afford. Although you will not be granted access to the cash, you are able to submit the invoice for the service or item which will then be paid by the scheme.

A fair decision in 2 hours

We have streamlined the lending process and kept things simple at Red Tree Finance, meaning once your application has been sent to us our Australian-based team can get back to you quickly. We give you a fair go based on your current circumstances.

Want to know more?

Get in touch with our friendly customer service team.

The request for your employment details by loan companies serves a meaningful purpose. Providing accurate employment information increases your chances of loan approval. If you’re looking for a loan, Red Tree Finance provides instant loans of $2000, $3000 all the way up to $5000. Whether you need a loan for bills, rental bond or just a weekend loan, we have you covered. Apply for a loan now or contact our friendly staff for more information.

The information provided in this blog is of a general nature and is provided without considering your specific objectives, financial situation, or needs. It is intended for informational purposes only and should not be relied upon as financial, investment, or other professional advice.

Before making any financial decisions or taking action based on the information presented, you are strongly encouraged to assess its appropriateness in light of your individual circumstances. Red Tree Finance does not intend to provide personalised financial advice, and you should seek independent financial, legal, tax, and other relevant advice tailored to your unique situation.