How do Secured Car Loans Work

How do Secured Car Loans Work?

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Everything you need to know about secured car loans

There are many different types of car loans and each one will suit people with different circumstances or needs. Secured car loans are an excellent option for those wanting to get a car loan with great interest rates and fees.

We can help you through the car loan process and make the experience as quick and easy and as possible. By asking for expert help with finding a car loan, you could be saving time, money and a huge amount of stress.

Find out how we can help you find a secured car loan that suits you.

What are secured car loans?

Secured car loans are a type of loan which is used solely for the purpose of buying a new or used car. You will borrow an agreed amount of money, which is then repaid with interest in equal payments made over an agreed term.

The ‘secured’ part of a secured car loan relates to the fact that the loan is connected to an asset or piece of collateral - in this case, the car itself. If you fail to make your repayments on the loan, the lender will be able to repossess the car.

Since lenders are able to repossess your car and resell it if you default on the loan, secured car loans are less risky for lenders. This means they generally have lower interest rates and fees than unsecured car loans.

Why should you get a secured car loan?

Car loans, in general, have many benefits, especially when compared to the alternative lending options such as credit cards, which often have much higher interest rates and fees. You’ll also benefit from the regular repayment schedules, which allow you to budget accordingly and pay the loan amount back over a pre-agreed time period.

Generally, secured car loans are the most attractive car loans to borrowers as they have the benefit of lower interest rates and fees. The car acts as collateral, or security, on the loan which helps to reassure the lender that they will not be left in a position where the loan repayments are not met and they do not have any asset to repossess.

It’s possible that with a secured car loan you may be able to borrow more money for your car purchase than with an unsecured loan. This means that you could opt for a slightly larger or fancier model of car than you would previously have been able to.

Occasionally, you may be able to get longer loan terms with a secured car loan. Again, this could help if you decide to borrow a larger amount of money as you’ll be able to pay it off over a longer period of time – putting you under less financial strain. Always remember to do your calculations though, and check those additional interest payments won’t mean you end up paying more.

Where can you get a secured car loan?

At Positive Lending Solutions, we offer a range of secured car loans from a variety of lenders. Due to our decades of experience working with people searching for secured car loans, we can guide you through the entire loan process, answering any questions or queries that you might have.

We also have access to a wide range of lenders. By asking for expert help from our team of brokers, you can save yourself hours of research. Get the right loan for you from a lender who we have worked with in the past and you’ll enjoy invaluable peace of mind.

What’s the process for getting secured car loans?

The process can seem daunting, but we can help you every step of the way so that things are easy and efficient. There are a couple of steps you need to be aware of including:

Getting your documents in order

This is really important as you’ll need to have key documents such as proof of identity, proof of income, and proof of residence. Not having these available when they’re needed can really slow down the process.

Check your credit score

This is free and easy to do. Knowing your credit score in advance will help you to prepare for how much you may be able to borrow and to know roughly the rates of interest and fees you’re likely to have to pay with your loan. Get a free credit check today.

Choose your vehicle

Before you apply, you need to know the type and model of the car that you want to buy. This will help lenders to assess whether they can approve the car loan application for you.


This will help to give you an idea of how much you’ll have to spend. Remember though it’s not a contract and generally it only lasts for one to three months. Lenders do not have to approve a loan even if they have given you pre-approval. Get your car loan pre-approval today.

Consulting with brokers

Asking for expert help can really help to save you time, money and stress. Brokers have experience in the industry as well as access to a wide range of lenders meaning that they’ll probably be able to get better results quicker than you can.

Getting a loan

Being approved for the loan is an exciting step. You’ll hear from your broker or lender to tell you the good news. After this, the funds will be transferred to your appointed bank account.

Buying a car

The final step sees you buying your car using the extra cash you now have available to you.

Questions to ask your broker before you get a secured car loan

Your broker should make you feel confident and secure that they’re getting you the best loan available to you. However, it’s always good to ask questions along the way and if you’re worried or unsure about anything.

Some questions that you may want to ask your broker could include:

  • What is the interest rate on the loan?
  • Is there anything you can do to help get a lower rate?
  • Will there be application fees?
  • Is it a fixed or variable interest rate?
  • How long does pre-approval last on the loan?
  • Can I make extra repayments? Are there penalty fees?
  • How do I make the repayments each month?

How can you compare lenders?

Leave it to the experts. We know which lenders will be the right people for you when helping you to get your loan.

We work with a wide range of lenders and have access to deals and interest rates that you may not find when searching online. Although there are many online comparison websites, it will generally save you time and money to ask the experts to help you when comparing lenders.

If you do want to do it yourself, always read reviews of lenders. Get a feel for whether they have a good reputation or not, then start to look at what their fees and interest rates are for secured car loans.

Ready to get a secured car loan?

If you’re feeling excited about applying for your loan, contact us today to take the first step. We want to help you get the best secured car loan for you.

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