Sometimes, the supporting documents produced by the borrower are not sufficient to guarantee the validation of a car loan. The credit institution can ask for additional guarantees, in order to ensure the security of the car loan granted. Several modes of these guarantees, called collateral, can be offered to you. See kuryevideo.org of critique.
Pledge on car credit
The pledge on car credit is the personal security mode most often proposed by the lending establishment. The pledge on auto credit consists in placing in guarantee a bank account, that the lending organization can seize in the event of default of payment of the monthly payments of reimbursement. Current account, passbook A, life insurance, employee savings…: any financial investment may be concerned.
When the lender calls on the pledge, the account placed as collateral is blocked. It is still possible to fund it, but any withdrawal of money is blocked until the loan is fully repaid.
More rarely used, the pledge of the vehicle imposes more constraints for the borrowing establishment. The vehicle acquired via consumer credit is then the subject of the signing of a contract, authorizing the lender to seize the vehicle for a forced sale in the event of default. This administrative particularity is registered at the prefecture when the registration card is issued, which prevents any resale of the vehicle until the pledge is lifted (at the end of the loan repayment).
Obligation to manage the sale of the vehicle, binding procedures for seizure: lending organizations rarely use the pledge contract.
The joint guarantee
When taking out a car loan, a person can accompany the lender by acting as a joint guarantor. In the event of default, this guarantor may be asked to assume the repayment of the monthly payments, without even notifying the lender.
The simple deposit
More rarely, the simple surety works on the same principle as the joint surety, with the notable exception that the surety can only be called upon if the borrower is declared insolvent. A significant nuance, pushing the banks to privilege the joint guarantee within the framework of a car loan. This deposit method can be taken out with several guarantors. This is called a multiple deposit.
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