For some people, there comes a time when they find themselves in a tight financial situation but are unable to borrow from traditional lenders, such as the bank. This may be for a variety of reasons such as a poor credit rating or unemployment.
Many individuals would then turn to secured loans, such as title loans, where credit and employment status is not considered. However, not everyone has a debt-free vehicle. One needs to have a debt-free vehicle with full-coverage insurance in order to qualify for a title loan.
Another reason why title loans may not be a viable option is because of the value of the vehicle. There simply may not be enough value in the vehicle in order to receive a substantial amount of funds from the loan. How does one go about receiving well-needed funds with these factors at play?
Motorcycle Storage Loan
A lesser known way of securing a loan is with a motorcycle storage loan. This type of loan involves the lender holding onto the motorcycle for the duration of the loan. The lender will have a secure facility that the collateral will be held in, that is locked and alarmed at all times. In addition to this, many lenders will also allow an individual to check-up on their motorcycle for peace of mind and to ensure that it is safe. Once the loan has been paid-off, one can pick up their motorcycle at any time they please.
One of the positive aspects of motorcycle storage loans is that many individuals do not use their motorcycle year-round anyways. That means that it can be used to secure a loan during the cold winter months, then the loan can be paid-off as the weather warms up and you will be free to use your motorcycle as you wish.
How Much Money Will I Receive?
The amount of funds received from the loan depends on how much equity is in the motorcycle. The higher the equity, the more funds one will be eligible to receive as a result of the motorcycle storage loan. For example, a motorcycle worth $6,000 will be eligible to receive more funds than a motorcycle worth$4,000.
Since the motorcycle will be held onto for the duration of the loan, almost the full value of the motorcycle can be loaned out. This is because there is less risk if the motorcycle is in the lender’s possession as opposed to on the road.
If you find yourself still needing more funds after considering both motorcycle storage loans and title loans, then you may have other collateral that can be utilized to receive additional funds. Collateral such as watercraft, snowmobiles, machinery, and equipment can be pledged as collateral for a loan. However, this collateral will need to be stored by the lender for the duration of the loan.
Snowmobiles can be a perfect asset to pledge as collateral for a loan. This is because they can only be used for a few months each year. One can take out a secured loan with their snowmobile as collateral in April, and pay the loan off by November. This way, you still have from November until March to enjoy your snowmobile.
Additionally, some professions find themselves needing certain equipment during certain seasons, but have no use for them in other seasons. Examples of this include snowblowers and tractors. Why have equipment sitting idle when you can use it as collateral to receive funds? These funds can then be reinvested in order to make additional revenue in the future.
You Always Have Options
All in all, motorcycle storage loans can be a viable option for those who are lacking other forms of collateral to obtain a loan, but do not meet the strict requirements of the bank. However, motorcycle storage loans are also useful to receive additional funds on top of another loan, such as a title loan or a unsecured loan.
If you do not have a motorcyle then take a hard look at the assets that you do own. Are any of them of a substantial value? Can you go without them for a few months, until the loan is paid-off? If the answer is yes, then you may want to think about pledging these assets as a security for a loan.