What is an asset loan?

Nov 17

An asset loan does not differ much from a traditional bank loan. As with bank loans, an asset-based loan requires a form of collateral to ensure repayment can be made in the case of a default, the types of assets accepted are just more varied.

The typical asset loan companies like Car Pawn Loan prefer motor vehicles, as the name suggests, but these are not the only assets they will accept. Most asset loan companies will also accept houses, caravans, boats, art, jewelry, memorabilia and other equity rich or resalable items.

Asset loan companies seem to be springing up all over the place these days and like with all businesses some are better than others. If you are in the market for fast cash and are looking into an asset-based loan it is worth doing your homework. You can quickly find a list of local companies on Google, it is worth contacting three or four and enquiring as to their interest rates and repayment periods. This can save you significantly on your bottom line.

Once you have located a reputable company, you will need to take your asset to them for an evaluation. The loan company will store the asset in a safe place until the loan is repaid. They will also insure the asset in case of fire, theft or other “natural disasters”. Keep in mind however that should you forfeit on the loan they have the legal right to sell the asset to recoup their costs.

To secure an asset loan requires minimal paperwork and turnaround time is usually under 30 minutes, making for fast access to cash without the need to sell the asset outright. The loan period for these types of loans is typically thirty days, but longer terms can be negotiated.