What is an Unsecured Car Loan?

Finance Paperwork with Glasses

When Middletown drivers are exploring their auto financing options, they often ask us, “What is an unsecured car loan?” The quick answer is that an unsecured car loan is a loan where the car isn’t considered collateral. Want to know more about the difference between secured and unsecured car loans, or are you wondering, is a car loan unsecured or secured? The finance team at Old Saybrook Chrysler Dodge Jeep RAM is here to help!

Is a Car Loan Unsecured or Secured?

Generally, it’s rare to find unsecured auto loans. Most car loans in New London are secured. Some places will provide unsecured auto loans, so make sure you know which type of loan you’re getting before you sign.

Difference Between Secured and Unsecured Car Loans

The car-as-collateral is the main difference between secured and unsecured car loans. When your car is collateral, the bank can repossess it if you fail to make your loan payments. For an unsecured auto loan, most lenders will require a co-signer. That person will be responsible for the loan if you fail to pay. Other differences include the loan terms, which are typically shorter for an unsecured auto loan, and it’s harder to qualify for one. Interest rates can also be different. While a secured auto loan has a fixed interest rate, an unsecured auto loan can have variable rates. If you don’t want to risk losing your vehicle to repossession, an unsecured auto loan can provide more confidence, but a secured auto loan is easier to get if you’ve had credit issues.

Secured vs. Unsecured Car Loans: Which is Best?

Secured auto loans are usually easier for Madison drivers to acquire since they have the security of using the car as collateral. The interest rates tend to be lower, but you run the risk of repossession if you stop making payments for any reason. Losing your vehicle won’t happen with an unsecured auto loan, although you might be paying higher monthly payments due to the shorter loan term, and higher interest rates. Which is best? That depends on your situation. Our finance can help you determine which is right for you.

Get Financing Advice at Old Saybrook Chrysler Dodge Jeep RAM

No matter where you are in the financing process, Old Saybrook Chrysler Dodge Jeep RAM can help! Turn to us for assistance in getting a car loan and more!

 

More from Old Saybrook Chrysler Dodge Jeep RAM

  • 2021 Dodge Charger Colors

      The 2021 Dodge Charger is a real head-turner on Middletown streets! With its formidable grille and husky structure to match the rumble of its powerful engine, no one can miss this muscle car coming their way. Part of the visual appeal comes from the Dodge Charger exterior colors. With fourteen bold choices, your Dodge…

  • 2022 Jeep Wagoneer Towing Capacity

    It’s been a long wait for the return of the Jeep Wagoneer to Middletown streets, but it’s finally on its way, and it’s pulling out all the stops! The Jeep Wagoneer towing capacity reaches a whopping 10,000 pounds, while the Jeep Grand Wagoneer towing capacity goes all the way to 9,850 pounds, making them both…

  • 2022 Jeep Grand Wagoneer Interior

      After nearly 30 years away from Middletown streets, the Jeep Grand Wagoneer is back! A legendary family-hauler, the Jeep Grand Wagoneer has a 3rd row seat for optimum seating and cargo space unlike anything you’ve seen. It’s all part of the vintage-inspired modern design that gives the Jeep Grand Wagoneer interior a style all…

Saved Vehicles

SAVED VEHICLES

You don't have any saved vehicles!

Look for this link on your favorites:

Save

Once you've saved some vehicles, you can view them here at any time.

Contact Us

(860) 388-4445

Call Now

255 Middlesex Tpke • Old Saybrook, CT 06475

Get Directions

Today's Hours:

Open Today! Sales: 9am-8pm

Open Today! Service: 7:30am-5pm

Old Saybrook Chrysler Dodge Jeep RAM 41.3069593, -72.3825927.