Did you know that it is possible to pawn your car to obtain a loan? Placing your vehicle provides additional guarantees to access the loan, on the principle of collateral. But the interest rate of the operation rather reserves it for rapid repayment over a short period.
Why Pledge Your Vehicle?
Pledging your car is a guarantee that can help you apply for a loan. In principle, it is similar to a collateral since the value of the pledged property offers additional security that accompanies the loan process.
The automobile pawnshop is a common practice which depends on certain conditions:
- You must own the pledged car
- The driving license must not be suspended
- Auctioneers must determine the value of the vehicle
Their estimate determines the amount of the loan granted, generally granted for one year with the possibility of making an early repayment without additional costs. At the end of the contract, the loan must be repaid; otherwise the car is sold at auction.
How To Pawn A Car?
A car backlog (รถค้างค่างวด, which is the term in Thai) is reported to the prefecture which issued its registration card. Its license plate is registered, making it impossible to resell the vehicle without the bank certifying the repayment of the credit in full.
In the event of non-payment with the Public Treasury, the State can order the pledging of your vehicle to guarantee part of your debt.
If you want to sell your car, you only have two options:
- Make an early repayment which lifts the pledge
- Obtain a loan repurchase that includes the pledged car
The Advantages And Disadvantages Of An Automobile Pledge
- The vehicle is not transferred, since it is pledged and represents a guarantee. As long as you pay back, it’s still yours.
- The total cost of credit is reduced if you repay quickly.
- The rate of a loan secured by a vehicle is much higher than a mortgage loan on real estate.