Business loan secured by a car

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The microcredit company VAYVND issues microloans to individuals online and in branches.
The microcredit company FinaGuru issues short-term and long-term online loans to individuals. The organization does not have a branch network; it operates remotely via the Internet.
Creditnice is a microfinance company operating since 2013. It specializes in loans with online processing, including to pay for purchases from partners; it also issues virtual credit cards and provides credit lines.
Creditify is a service for issuing urgent online loans to a bank card. You can take out a loan on a card from this company for various purposes. Income certificates and guarantors are not required.

Features of loans secured by a car (PTS) for legal entities and individual entrepreneurs

A secured loan is the most popular form of lending for individual entrepreneurs and LLCs. In addition to real estate, you can pledge motor vehicles, including a car or truck, special equipment, and self-propelled vehicles.

Distinctive features of this proposal:

  • The maximum loan limit is limited by the market value of the car
  • Loan terms will be more favorable with collateral, for example, the rate will be lower
  • The PTS remains with the bank for the entire loan term
  • The borrower remains with the vehicle and can continue to use it
  • The owner cannot sell or donate the pledged car until he pays off the debt
  • Certain requirements regarding age and technical condition are imposed on vehicles.
  • The car can be listed on the company’s balance sheet, belong to the owners or sometimes to third parties
  • The money can be spent on a variety of business needs, depending on the program.


How is the loan provided?
For a one-time loan, money is credited to the current account of a company or individual entrepreneur, from where it can be spent to make non-cash payments. Cash withdrawal is provided only for individuals. If the borrower has issued a line of credit, funds will be received in installments as needed. If the line is renewable, after repaying the debt, the limit can be used again. For a non-renewable line this option is not available.

An individual entrepreneur owns a personal car, can I get financing for it?
A loan for individual entrepreneurs secured by a car can be taken out for consumer or commercial needs. In the first case, the money can be spent for any purpose, including business, and in the second – only for entrepreneurial activities. In case of financial problems, the individual entrepreneur is liable with all his personal property for credit reasons, just like an individual.

How does a bank limit the use of a secured car?
After signing the contract, the car remains in the use of the borrower; the bank does not take it away. The lender only keeps the title itself until the debt is fully repaid. But it is prohibited to carry out any actions aimed at alienating the car, including sale, exchange, donation. Otherwise, the vehicle can be operated as before.

Why did the bank refuse even if there was collateral?
You can be refused for one of the following reasons:

Errors or inconsistencies in documents
The collateral does not meet the established requirements
Bad credit history or no credit history
Too high credit load
The borrower does not meet the specified parameters by date of registration, revenue, type of activity
The owner or manager is bankrupt, disqualified, involved in court cases
The company’s debt to tax and other funds
What year should the car be?
The age of the vehicle being pledged is determined by the bank; most often for domestic brands it is no more than 5-7 years, for foreign brands – 10-15 years. In addition, the vehicle must be on the move, technically sound, without visible defects. It is also important to provide all documents for collateral with registered ownership.

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