Can a Car on Installment Plan Still Be Used for Loans?
2 Answers
An installment car cannot be used for mortgage loans because it is purchased through an installment loan, which already involves a mortgage during the installment period. The vehicle registration certificate cannot be used for a second mortgage, and the individual does not have ownership of the car during the installment period. Additionally, the installment loan institution will retain the vehicle registration certificate. However, it is possible to obtain a bridging loan, which involves repaying the car loan first and then using the car as collateral. Below is a detailed introduction to car installment purchases: 1. Introduction: Car installment purchases refer to users paying in several installments, with monthly payments. Installment payments are currently a hot topic in the car market, and in the current sluggish market environment, many businesses see installment payments as an effective way to capture market share. 2. Payment Methods: The automotive industry offers various forms of installment payments, mainly including three types: bank consumer loans, loans from car manufacturers' financial companies, and financing lease arrangements.
If I'm currently paying for my car in installments and need to borrow more money due to financial constraints, it is possible, but there are certain conditions. First, the bank or lending institution will need to assess the car's residual value—that is, how much it's worth now—and check how much room is left in your remaining installment payments. If the car holds its value well, like a Toyota or Honda, and you've paid off about half of the loan, you might be able to use it as collateral to borrow more. However, your credit record must be good; otherwise, interest rates could skyrocket, or you might even risk rejection. I tried this last year for home renovations and shopped around, but due to my low credit score, the interest doubled—it was better to just cut expenses. Also, remember that taking out another loan will increase your monthly payments, and if you can't keep up, the car might be repossessed. It's best to calculate your financial capacity before applying. Some online platforms offer quick pre-approvals, which are convenient but full of pitfalls, so always review the contract details yourself.
