Q: What documents do applicants need to provide?
A: Applicants need to be able to show steady income. That means at least two pay stubs, a verification letter from an employer or something similar. Proof of residents, such as a mortgage or lease, two different forms of government-issued identification and a voided check.
Additional documentation needed varies with the asset being used to secure the note. If it’s a vehicle, applicants should provide clear photographs of the odometer, exterior, interior, proof of ownership and proof of comprehensive insurance coverage. If it’s land, applicants need to provide a CMA (comparative market analysis) and a property tax assessment. Similar requirements exist when a home is the collateral, as well as the balance of the mortgage and clear photographs of the home’s inside and outside. If the collateral is a mobile home, a property tax assessment, a letter giving a realtor’s opinion the property, proof of insurance and clear photographs of the home’s inside, outside and serial number are necessary. In the case of a trailer or RV, clear photographs of all four sides of the outside and two shots of the inside are necessary, in addition to proof of insurance.
Q: What if the applicant is self-employed?
A: You can still prove income if you’re self-employed. Income tax assessments, bank statements and other documentation can still show how much money you have coming in each month. Depending on what you can provide as far as verification, you may have to get someone with stable employment, such as a relative, or spouse, to serve as your co-signer.
Q: What are the current interest rates?
A: There is a range on this, depending on the sort of collateral that the borrower is using. Right now, the range goes from 2.5 to 4.3 percent per month.
Q: Do you have to run my credit history?
A: We do perform credit checks, but the score does not influence the decision whether or not to fund the loan.
Q: How do you decide how much to lend?
A: We’ve put together an algorithm that tells us how much the wholesale value is for vehicles that go up as collateral. For other assets, we request proof of certified values, and then we’ll lend up to about 40 percent of that value. The more valuable the asset, the higher the percentage might be.
Q: Do you offer loans to people who receive pensions or disability payments?
A: We do, but we also want to see that the borrower has kept a stable residency history, and we are more likely to ask for a co-signer.
Q: How long do borrowers have to wait for an answer?
The speed of the process depends on the applicant. The more complete the initial application, the better our chances of completing the assessment quickly. When all of the required information is provided up front, we can render a decision within a business day.
Q: Does the borrower have to surrender the title to the assets being leveraged?
A: The title remains in the borrower’s name, but there is a lien placed on it until the borrower has satisfied the loan in full. No matter what sort of asset we’re talking about, it stays with the borrower.
Q: Can asset secured loans help improve credit score?
These loans provide reports to TransUnion and Equifax. If borrowers keep making monthly payments, their credit score will continue to climb.
Q: Is it possible to get this type of loan while in bankruptcy?
A: It is, but only when the collateral is not part of what is listed in the bankruptcy or consumer proposal.