{"id":306,"date":"2026-05-15T04:16:03","date_gmt":"2026-05-15T04:16:03","guid":{"rendered":"https:\/\/www.way.com\/auto-refinance\/guide\/?p=306"},"modified":"2026-05-15T04:16:03","modified_gmt":"2026-05-15T04:16:03","slug":"auto-equity-loan","status":"publish","type":"post","link":"https:\/\/www.way.com\/auto-refinance\/guide\/auto-equity-loan\/","title":{"rendered":"What is auto equity loan?"},"content":{"rendered":"<p><i><span data-contrast=\"auto\">Are you in a bind and need some quick cash for unexpected expenses? Auto equity loans can be a lifesaver when\u00a0you\u2019re\u00a0looking for a secured loan\u00a0option. But before you go down that road, you should keep a few important things in mind. Let me fill you in on the basics you need to know before taking the plunge.<\/span><\/i><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Financial experts ask you to pay off your car loans as fast as possible to build equity in your car. Positive equity can help you use your car as collateral for financial emergencies and situations where you need quick cash. Auto equity loans are one of the options used by borrowers in such circumstances. This post breaks down everything you need to know about vehicle equity!<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.way.com\/auto-refinance\/guide\/auto-equity-loan\/#What_is_an_auto_equity_loan\" >What is an auto equity loan?\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.way.com\/auto-refinance\/guide\/auto-equity-loan\/#Who_should_qualify_for_an_auto_equity_loan\" >Who should qualify for an\u00a0auto equity\u00a0loan?\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.way.com\/auto-refinance\/guide\/auto-equity-loan\/#How_does_an_auto_equity_loan_work\" >How does an auto equity loan work?\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.way.com\/auto-refinance\/guide\/auto-equity-loan\/#How_to_get_an_auto_equity_loan\" >How to get an auto equity loan\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.way.com\/auto-refinance\/guide\/auto-equity-loan\/#Where_to_find_auto_equity_loans\" >Where to find auto equity loans\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.way.com\/auto-refinance\/guide\/auto-equity-loan\/#Credit_score_required_for_an_auto_equity_loan\" >Credit score\u00a0required\u00a0for an auto equity loan\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.way.com\/auto-refinance\/guide\/auto-equity-loan\/#Best_alternatives_to_auto_equity_loan\" >Best alternatives to auto equity loan\u00a0<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.way.com\/auto-refinance\/guide\/auto-equity-loan\/#Cashback_auto_loan_refinancing\" >Cashback auto loan refinancing<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.way.com\/auto-refinance\/guide\/auto-equity-loan\/#Auto_title_loans\" >Auto title loans<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.way.com\/auto-refinance\/guide\/auto-equity-loan\/#Trading_in_your_car_sell_it_to_a_third_party\" >Trading in your car\/ sell it to a third party<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.way.com\/auto-refinance\/guide\/auto-equity-loan\/#Payday_loans\" >Payday loans<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/www.way.com\/auto-refinance\/guide\/auto-equity-loan\/#Personal_loans\" >Personal loans<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/www.way.com\/auto-refinance\/guide\/auto-equity-loan\/#Home_equity_loans\" >Home equity loans<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/www.way.com\/auto-refinance\/guide\/auto-equity-loan\/#Auto_equity_loans_vs_Car_title_loans\" >Auto equity loans vs. Car title loans<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/www.way.com\/auto-refinance\/guide\/auto-equity-loan\/#Can_I_take_a_loan_against_my_car\" >Can I take a loan against my car?\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/www.way.com\/auto-refinance\/guide\/auto-equity-loan\/#Final_thoughts\" >Final thoughts\u00a0<\/a><\/li><\/ul><\/nav><\/div>\n<h2 aria-level=\"2\"><span class=\"ez-toc-section\" id=\"What_is_an_auto_equity_loan\"><\/span><span data-contrast=\"none\">What is an auto equity loan?<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;134245418&quot;:true,&quot;134245529&quot;:true,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559738&quot;:299,&quot;335559739&quot;:299}\">\u00a0<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span data-contrast=\"auto\">Auto equity loans are\u00a0loans\u00a0in which you\u00a0use the equity you have in your car to borrow\u00a0money. In other words, it is the\u00a0car\u2019s\u00a0value minus what you\u00a0still owe. For example, if\u00a0your car is $20,000 and you owe $12,000 on\u00a0it, you might be able\u00a0to borrow $8000 against it as equity.\u00a0<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">However, you can only take a car equity loan if your vehicle has positive equity,\u00a0<\/span><b><span data-contrast=\"auto\">i.e., if the resale value is more than the remaining loan balance.<\/span><\/b><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/p>\n<h2 aria-level=\"2\"><span class=\"ez-toc-section\" id=\"Who_should_qualify_for_an_auto_equity_loan\"><\/span><span data-contrast=\"none\">Who should qualify for an\u00a0auto equity\u00a0loan?<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;134245418&quot;:true,&quot;134245529&quot;:true,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559738&quot;:299,&quot;335559739&quot;:299}\">\u00a0<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span data-contrast=\"auto\">You may qualify for an auto equity loan if you satisfy the following criteria:<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/p>\n<ul>\n<li><b><span data-contrast=\"auto\">You own your car:<\/span><\/b><span data-contrast=\"auto\">\u00a0In qualifying as\u00a0a viable\u00a0applicant for an auto equity loan, sufficient equity serves as the collateral for the loan.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:0}\">\u00a0<\/span><\/li>\n<li><b><span data-contrast=\"auto\">You have the financial means to make payments:<\/span><\/b><span data-contrast=\"auto\">\u00a0Given the potential consequences for your car, it is critical to\u00a0ascertain\u00a0that you\u00a0are able to\u00a0make monthly payments. If you\u00a0fail to\u00a0do so, your car could be repossessed.\u00a0<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:0}\">\u00a0<\/span><\/li>\n<li><b><span data-contrast=\"auto\">Possible Lower Interest Rates:<\/span><\/b><span data-contrast=\"auto\">\u00a0It may be prudent to choose this uncommon loan type in this situation as opposed to something more readily available.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:0}\">\u00a0<\/span><\/li>\n<\/ul>\n<h2 aria-level=\"2\"><span class=\"ez-toc-section\" id=\"How_does_an_auto_equity_loan_work\"><\/span><span data-contrast=\"none\">How does an auto equity loan work?<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;134245418&quot;:true,&quot;134245529&quot;:true,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559738&quot;:299,&quot;335559739&quot;:299}\">\u00a0<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span data-contrast=\"auto\">Auto equity loans work similarly to home equity loans, except that you use your car instead of putting up your house as collateral. Hence, a car\u00a0<\/span>equity loan is also secured\u00a0<span data-contrast=\"auto\">and can help you get affordable rates and a better loan term. However, the amount you can borrow depends on the positive equity you own in the vehicle.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Firstly, you need to own\u00a0the\u00a0car to apply for an auto equity loan. Secondly, you should\u00a0submit\u00a0proof of income and your\u00a0driver\u2019s\u00a0license. In addition, you need to ensure a good credit score to apply for the auto equity loan. For instance, it will\u00a0determine\u00a0the interest rates and the amount you can borrow.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">While some lenders will only allow you to borrow an amount equal to the equity, others will\u00a0<\/span>let you borrow up to 125%.<span data-contrast=\"auto\">\u00a0For example,\u00a0let\u2019s\u00a0say you have a car with a current resale value of $15,000 and a remaining loan balance of $5000. Then, the equity you own in the car will be $15,000 &#8211; $5000 = $10,000. Similarly, the equity loan rate averages between 6% and 36%.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Hence, depending on the lender, you can borrow between $10,000 and $12,500 (125% of the equity amount). However, failure to repay the loan on time can result in repossession and affect your credit score. For this reason, it is recommended to resort to a vehicle equity loan only for absolute emergencies.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/p>\n<h2 aria-level=\"2\"><span class=\"ez-toc-section\" id=\"How_to_get_an_auto_equity_loan\"><\/span><span data-contrast=\"none\">How to get an auto equity loan<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;134245418&quot;:true,&quot;134245529&quot;:true,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559738&quot;:299,&quot;335559739&quot;:299}\">\u00a0<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p aria-level=\"3\"><strong>Evaluate your credit\u00a0<\/strong><\/p>\n<p><span data-contrast=\"auto\">It is prudent to review your credit reports from all three main credit bureaus\u2014Equifax, TransUnion, and Experian\u2014prior to\u00a0applying\u00a0for any loan. The lender is likely to conduct a credit check on your credit reports during the financing application procedure.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Thus, it is critical to\u00a0ascertain\u00a0one\u2019s\u00a0financial situation prior to\u00a0submitting\u00a0loan applications. The\u00a0Fair Credit Reporting Act (FCRA)\u00a0provides individuals\u00a0with the ability to contest errors found on their credit reports by\u00a0entering\u00a0into\u00a0a dispute process with the relevant credit reporting agency.\u00a0<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/p>\n<p aria-level=\"3\"><strong>Compare rates from lenders\u00a0<\/strong><\/p>\n<p><span data-contrast=\"auto\">As with any other form of financing, it is prudent to compare loan offers from multiple lenders when considering auto equity loans. By doing so, you can\u00a0frequently\u00a0find the most\u00a0advantageous\u00a0deals, such as reduced fees and interest rates, which can result in significant cost savings.\u00a0<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">A personal loan calculator allows you to compare the total cost and payment quantities of multiple loan offers over time.\u00a0<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/p>\n<p aria-level=\"3\"><strong>Find your\u00a0car\u2019s\u00a0worth\u00a0<\/strong><\/p>\n<p><span data-contrast=\"auto\">You should then\u00a0determine\u00a0the value of your car to assess your borrowing capacity more accurately.\u00a0Consult an industry publication like Edmunds or Kelley Blue Book for assistance.\u00a0If you still have an auto loan affixed to your car, deduct the outstanding loan balance from the value of your vehicle to\u00a0determine\u00a0the amount of available equity.\u00a0<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/p>\n<p aria-level=\"3\"><strong>Apply for a car equity loan<\/strong><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;134245418&quot;:true,&quot;134245529&quot;:true,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559738&quot;:281,&quot;335559739&quot;:281}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">You may\u00a0be prepared\u00a0to apply for\u00a0an auto\u00a0equity\u00a0loan once\u00a0you have determined your top choice.\u00a0Submitting multiple\u00a0pre-approval\u00a0requests\u00a0to lenders who\u00a0provide\u00a0this option\u00a0is\u00a0generally\u00a0acceptable.\u00a0Generally,\u00a0these\u00a0applications require mild\u00a0credit\u00a0inquiries, which\u00a0have no\u00a0bearing\u00a0on the\u00a0applicant\u2019s\u00a0credit score.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">However, it is crucial to restrict the number of comprehensive loan applications you\u00a0submit, as these\u00a0frequently\u00a0involve hard credit inquiries that can negatively affect your credit score.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Due to the fact that\u00a0auto equity loans may be categorized as a form of personal loan, you risk\u00a0establishing\u00a0a negative credit history if you\u00a0submit\u00a0multiple loan applications within a brief period. Consequently, it is more prudent to choose your preferred lender in advance (and verify that you are likely to meet the\u00a0lender\u2019s\u00a0approval requirements).<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/p>\n<p aria-level=\"3\"><strong>Loan repayment\u00a0<\/strong><\/p>\n<p><span data-contrast=\"auto\">You must repay\u00a0your auto equity loan\u00a0in accordance with\u00a0the terms of the loan agreement. If you repay the loan as agreed, your credit history and credit score will be positively\u00a0impacted. If not, you\u00a0run the risk of having your car\u00a0repossessed, as it functions as collateral for the loan.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/p>\n<h2 aria-level=\"3\"><span class=\"ez-toc-section\" id=\"Where_to_find_auto_equity_loans\"><\/span><span data-contrast=\"none\">Where to find auto equity loans<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;134245418&quot;:true,&quot;134245529&quot;:true,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559738&quot;:281,&quot;335559739&quot;:281}\">\u00a0<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span data-contrast=\"auto\">While you get your auto equity loan based on interest rates, loan terms, credit score requirements, and the\u00a0car\u2019s\u00a0value, you mostly find auto equity loans with banks, credit unions, and online lenders.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/p>\n<p aria-level=\"2\"><span data-contrast=\"none\">Pros and cons of auto equity loan<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;134245418&quot;:true,&quot;134245529&quot;:true,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559738&quot;:299,&quot;335559739&quot;:299}\">\u00a0<\/span><\/p>\n<table data-tablestyle=\"MsoTableGrid\" data-tablelook=\"1696\" aria-rowcount=\"4\">\n<tbody>\n<tr aria-rowindex=\"1\">\n<td data-celllook=\"4097\"><b><span data-contrast=\"auto\">Pros<\/span><\/b><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:0}\">\u00a0<\/span><\/td>\n<td data-celllook=\"17\"><b><span data-contrast=\"auto\">Cons<\/span><\/b><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:0}\">\u00a0<\/span><\/td>\n<\/tr>\n<tr aria-rowindex=\"2\">\n<td data-celllook=\"4096\"><b><span data-contrast=\"auto\">Lower interest rates:<\/span><\/b><span data-contrast=\"auto\">\u00a0Since it is a secured loan, you get access to lower rates and better terms<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:0}\">\u00a0<\/span><\/td>\n<td data-celllook=\"16\"><b><span data-contrast=\"auto\">Not offered by all lenders:<\/span><\/b><span data-contrast=\"auto\">\u00a0Auto equity loans may not be available to all lenders; instead, it is mostly provided by credit unions.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:0}\">\u00a0<\/span><\/td>\n<\/tr>\n<tr aria-rowindex=\"3\">\n<td data-celllook=\"4096\"><b><span data-contrast=\"auto\">Larger loan amounts:<\/span><\/b><span data-contrast=\"auto\">\u00a0The amount you borrow depends on how much equity you have in your car.\u00a0For instance, a higher-valued car with maximum equity will offer you large loan amounts.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:0}\">\u00a0<\/span><\/td>\n<td data-celllook=\"16\"><b><span data-contrast=\"auto\">Potential repossession:<\/span><\/b><span data-contrast=\"auto\">\u00a0Failure to make payments can result in car repossession.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:0}\">\u00a0<\/span><\/td>\n<\/tr>\n<tr aria-rowindex=\"4\">\n<td data-celllook=\"4352\"><b><span data-contrast=\"auto\">Lenient approval criteria:<\/span><\/b><span data-contrast=\"auto\">\u00a0Having positive equity can result in quicker approvals.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:0}\">\u00a0<\/span><\/td>\n<td data-celllook=\"272\"><b><span data-contrast=\"auto\">Full-coverage auto insurance:<\/span><\/b><span data-contrast=\"auto\">\u00a0Most lenders often require full-coverage insurance with a low deductible to be eligible for an auto equity loan.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:0}\">\u00a0<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h2 aria-level=\"2\"><span class=\"ez-toc-section\" id=\"Credit_score_required_for_an_auto_equity_loan\"><\/span><span data-contrast=\"none\">Credit score\u00a0required\u00a0for an auto equity loan<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;134245418&quot;:true,&quot;134245529&quot;:true,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559738&quot;:299,&quot;335559739&quot;:299}\">\u00a0<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span data-contrast=\"auto\">As you get auto equity loans with your\u00a0vehicle\u2019s\u00a0value, you can opt for financing even if your credit score\u00a0isn\u2019t\u00a0excellent. The credit score criteria for each lender vary. So, always study the credit requirements before applying for\u00a0a loan. \u00a0<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Check your credit score and reports in advance to see what type of loan you require and how much you must pay. Some lenders also offer pre-approved applications that you can fill out to\u00a0determine\u00a0your eligibility and\u00a0likely rate\u00a0with only a soft credit review.\u00a0<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/p>\n<h2 aria-level=\"2\"><span class=\"ez-toc-section\" id=\"Best_alternatives_to_auto_equity_loan\"><\/span><span data-contrast=\"none\">Best alternatives to auto equity loan<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;134245418&quot;:true,&quot;134245529&quot;:true,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559738&quot;:299,&quot;335559739&quot;:299}\">\u00a0<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3 aria-level=\"3\"><span class=\"ez-toc-section\" id=\"Cashback_auto_loan_refinancing\"><\/span>Cashback auto loan refinancing<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span data-contrast=\"auto\">If you\u00a0anticipate\u00a0a cash crunch due to high monthly car loan payments, a better\u00a0option\u00a0would be to refinance your auto loan to get better terms and conditions. The benefits of doing this are that besides lowering your APRs and monthly payments, you can also borrow an\u00a0additional\u00a0amount based on the equity in your vehicle.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/p>\n<h3 aria-level=\"3\"><span class=\"ez-toc-section\" id=\"Auto_title_loans\"><\/span>Auto title loans<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span data-contrast=\"auto\">Auto title loans offer fast cash, but you must give up the vehicle title until you pay off the loan.\u00a0So\u00a0choose this option only if you are desperate for funds and can afford to pay high rates for the short term.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/p>\n<h3 aria-level=\"3\"><span class=\"ez-toc-section\" id=\"Trading_in_your_car_sell_it_to_a_third_party\"><\/span>Trading in your car\/ sell it to a third party<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span data-contrast=\"auto\">If you think\u00a0you\u2019re\u00a0stuck\u00a0with a bad car loan, you can always trade in your\u00a0car for a cheaper one. If it\u00a0is too old to be resold,\u00a0sell it off and use the money for your\u00a0immediate expenses.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/p>\n<h3 aria-level=\"3\"><span class=\"ez-toc-section\" id=\"Payday_loans\"><\/span>Payday loans<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span data-contrast=\"auto\">Payday loans are short-term, high-interest loans based on monthly income. They\u00a0don\u2019t\u00a0account for the\u00a0borrower\u2019s\u00a0ability to repay and, hence, should be treated\u00a0with caution.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/p>\n<h3 aria-level=\"3\"><span class=\"ez-toc-section\" id=\"Personal_loans\"><\/span>Personal loans<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span data-contrast=\"auto\">A personal loan may be better if you have a good credit score and payment history. You can also avoid the need to put up collateral.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/p>\n<h3 aria-level=\"3\"><span class=\"ez-toc-section\" id=\"Home_equity_loans\"><\/span>Home equity loans<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span data-contrast=\"auto\">If you own a house, you can use it as collateral for a home equity loan and get cash in hand.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/p>\n<h3 aria-level=\"2\"><span class=\"ez-toc-section\" id=\"Auto_equity_loans_vs_Car_title_loans\"><\/span>Auto equity loans vs. Car title loans<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span data-contrast=\"auto\">Auto equity loans and car title loans may look\u00a0similar at first glance. However,\u00a0it\u2019s\u00a0important to know that these two types of funding are not the same.\u00a0<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/p>\n<p>Auto equity loans are a type of personal loan where you use the value of your car as collateral.\u00a0<span data-contrast=\"auto\">A car title loan is different; it is\u00a0similar to\u00a0payday loans and pawnshop loans, which are both types of high-cost monthly loans. People can get these loans quickly and with little or no credit check, but the interest rates can be as high as 300% APR.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/p>\n<h2 aria-level=\"3\"><span class=\"ez-toc-section\" id=\"Can_I_take_a_loan_against_my_car\"><\/span><span data-contrast=\"none\">Can I take a loan against my car?<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;134245418&quot;:true,&quot;134245529&quot;:true,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559738&quot;:281,&quot;335559739&quot;:281}\">\u00a0<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span data-contrast=\"auto\">Yes, you can take a loan against your car. A\u00a0\u201cpink slip loan\u201d\u00a0or\u00a0\u201ctitle pawn\u201d\u00a0is another\u00a0name for a car title loan. This\u00a0type of loan uses\u00a0your car as collateral.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Anyone can get a car title loan and borrow between 25% and 50% of the value of their car in exchange for giving the lender the title to their car as protection.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Final_thoughts\"><\/span><span data-contrast=\"auto\">Final thoughts<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span data-contrast=\"auto\">No matter what you need money for, you can use the value of your car as a source when times are tough. It will also give you better terms and lower interest rates than other loans for people with\u00a0bad credit. Just make sure to keep making your payments on time, or you could lose your car.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Are you in a bind and need some quick cash for unexpected expenses? Auto equity loans can be a lifesaver when\u00a0you\u2019re\u00a0looking for a secured loan\u00a0option. But before you go down that road, you should keep a few important things in mind. Let me fill you in on the basics you need to know before taking&hellip; <a class=\"more-link\" href=\"https:\/\/www.way.com\/auto-refinance\/guide\/auto-equity-loan\/\">Continue reading <span class=\"screen-reader-text\">What is auto equity loan?<\/span><\/a><\/p>\n","protected":false},"author":5,"featured_media":310,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18],"tags":[],"class_list":["post-306","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-auto-refinance","entry"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.1 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>What is auto equity loan? - auto refinance guides<\/title>\n<meta name=\"description\" content=\"Auto equity loan seem like a great way to get some fast cash for emergency expenses. But what else should you know before taking one?\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.way.com\/auto-refinance\/guide\/auto-equity-loan\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What is auto equity loan? - auto refinance guides\" \/>\n<meta property=\"og:description\" content=\"Auto equity loan seem like a great way to get some fast cash for emergency expenses. 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