How many auto loan categories are there?

Auto loans come in two flavors: secured and unsecured. A lien is placed on the car being acquired by the lender as security for a secured loan. Other forms of secured loans will place a lien on the borrower's other assets, such as a house or another car, as collateral. If payments are not paid, the lender may seize the asset, sell it, and use the proceeds to satisfy the outstanding loan sum. It's critical for borrowers to comprehend whose assets are liable to confiscation because they are secured by loans.

Contrarily, an unsecured loan is not guaranteed by any assets. Lenders have to use various legal procedures to recover unpaid debt from borrowers if payments are missing. Because of this, unsecured loans frequently have higher fees and interest rates. The most popular kind of auto loan for both new and second-hand cars is a secured loan. The car has a lien on it as collateral for the loan, and the title cannot be transferred until the lien has been satisfied. The lender has the right to seize your car and sell it to recoup the money you owe on the loan if you get behind on your payments. Check out here to know more - https://nationalloans.com.au/