If you need a cash loan secured by a car, you can apply not only to a bank, but also to a private financial organization. Working with a car pawnshop allows you to get money quickly, without going through lengthy bureaucratic procedures or spending time waiting a long time for a response to your application. However, banks still have their own advantages. So which option is better? To answer this question, we will compare the terms offered by banks and car pawnshops.
Where Is It Better to Take Out a Loan Secured by a Car?
Every situation is unique. That is why the question of where it is better to take out a loan secured by a car should also be considered individually. Before comparing the terms, we will briefly explain the advantages of getting a loan secured by a vehicle from each institution.
Car Pawnshop or Bank: What Should You Choose?
To make the right decision and take out a loan secured by a car on the most favorable terms, answer a few simple questions:
- What amount are you expecting?
- When will you need the money?
- What documents can you provide at the institution’s request?
- Do you plan to use the car after receiving a loan secured by it?
Advantages of a Loan from a Car Pawnshop
The main advantage of applying to a private financial company is the ability to get money here and now. As a rule, a loan secured by a vehicle is arranged within one day. Once all the formalities are completed and you submit the application, you will have to wait from 15 minutes to 2 hours for a response.
Another advantage is that you will not have to look for where you can get a loan secured by a car with a poor credit history or without official employment. Car pawnshop uses alternative methods for checking clients’ solvency. Therefore, this option for obtaining a loan secured by a car is not only fast, but also reliable.
Which Bank Offers the Best Loan Secured by a Car?
A loan secured by a car from a bank also has its advantages. Regular clients of a financial institution can count on discounts and other favorable offers. However, arranging a loan secured by a car may not be so simple for new borrowers: they will have to undergo lengthy checks and gradually improve their rating.
To find out which bank offers a loan secured by a car, you will also need to study many offers. This is reasonable if you do not have urgent financial problems. However, if you needed the money “yesterday”, you will have to look for alternatives.
What Documents Are Needed to Get a Loan Secured by a Car?
If you compare the minimum document packages required by banks and pawnshops, you will clearly see that the latter have much lower requirements for their clients.
| Documents | Pawnshop | Bank |
| Passport | ✅ | ✅ |
| Identification code | ✅ | ✅ |
| Vehicle registration certificate | ✅ | ✅ |
| Income certificate | ❌ | ✅ |
| Employment certificate | ❌ | ✅ |
| Account statement | ❌ | ✅ |
| Surety agreement | ❌ | ✅ |
How Quickly Can You Get Money Secured by a Car?
Car pawnshops make it possible to quickly receive the required amount in cash secured by a car or by transfer to a card. With banks, you will have to spend more time.
| Process | Pawnshop | Bank |
| Submitting an application | 5-15 minutes | 1-2 hours |
| Application review | From 15 minutes to 2 hours | From 1 day to 2 weeks |
| Contract execution | 5-10 minutes | 2-3 hours |
| Preparing a commercial offer | 5 minutes | 1-2 hours |
| Disbursement of funds | From 15 minutes to 1 hour | Up to 3 days |
What Is the Interest Rate on a Loan Secured by a Car?
When studying which banks provide loans secured by a car, you may notice that, on average, their interest rates are lower than those of private financial organizations. However, this is not always the case. In addition, you need to consider other costs included in the service terms.
| Institution | Actual estimated interest rate | Fees | Insurance |
| PrivatBank | 38.4-48.4% | 2.5% + 0.5% monthly | 5% |
| Oschadbank | 17-56% | 1.5% | 5% |
| Ukrgasbank | 15.9-39.8% | 2.0% + 1% monthly | 5% |
| Credit Agricole | Up to 96.22% | 3% | 5% |
| TRUST AUTO Car Pawnshop | 48-60% | UAH 2,000 for document processing | At the client’s request |
Can You Keep Using the Car During the Loan?
Another advantage of a car pawnshop is that most clients can count on pledging a car while retaining the right to drive it. With a bank, obtaining a loan secured by a car without placing it in a parking lot is much more difficult.
| Conditions When the Right to Drive Is Preserved | Pawnshop | Bank |
| Increased interest rates | ✅ | ✅ |
| Increased requirements for the client | ❌ | ✅ |
| Service at an authorized service station | ❌ | ✅ |
| Regular visits to the financial institution | ❌ | ✅ |
| Additional inspection at the client’s expense | ❌ | ✅ |
What Risks Are Associated with Lending Secured by a Car?
When choosing where you can leave a car as collateral, be sure to compare the risks. Let us consider the main scenarios of problematic situations at a bank or car pawnshop.
| Scenario | Pawnshop | Bank |
| Intentional breach by the client | Penalty interest, and in special cases, confiscation of the car through the enforcement service | |
| Delay of several days | It is possible to request a one-time payment deferral or contract extension | A decision to change the contract terms may be reviewed for weeks |
| Reduced solvency | Refinancing is possible | Refinancing is offered only when there are no other options |
| Car breakdown | No penalties | Revision of terms in favor of the bank |
| Early repayment | No penalties | Fine, increased interest, fees |
Cash Loans Secured by a Car from TRUST AUTO Car Pawnshop
By contacting our company, you can take out a loan secured by a car on favorable terms. TRUST AUTO Car Pawnshop offers money secured by a car while preserving the right to drive it. If you use the car to earn income, we will not insist on placing it in a parking lot. We also review loan applications quickly: the money can be received on the day of application or on the next business day.
