Can You Borrow Against an Auto Loan?
The only way to borrow against an auto loan is to use the title as collateral. This is a very risky way of borrowing money. If you cannot pay the loan, you will lose your car. Moreover, the loan you receive depends greatly on the value of the car at the time you wish to take the loan. Before you even consider this type of loan, consider the following:
- You will have to assess the value of the car by checking the Kelley Blue Book, which is the best way to get an accurate value of your car.
- Also keep in mind that the approximate rate given for vehicles is up to half their value.
- Depending upon the state you live in, you may not be able to borrow more than $2500 against the value of your car.
- Your credit score will determine the interest rate you pay on the loan.