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    myboys1976's Avatar
    myboys1976 Posts: 3, Reputation: 1
    New Member
    		  
    #1

    Jun 24, 2014, 07:57 PM
    Banks that converts auto loans to signature-personal loans?
    what banks converts auto loans to signature loan or unsecured loans due to the bank not receiving the car title?
    odinn7's Avatar
    odinn7 Posts: 7,691, Reputation: 1547
    Entomology Expert
    		  
    #2

    Jun 24, 2014, 08:18 PM
    Not sure I understand your question but here is how it works for a car loan...when a bank writes a loan on a car, they get the title until the loan is paid off. If they never get the title, you are in default of the loan. This could lead to demand for immediate payment of what is owed, or repossession of the car, maybe both....maybe more. In my time as a car dealer, I have never seen a bank that didn't care that they didn't get the title and simply wrote out the loan into a personal, unsecured loan. The whole point of a car loan is that the bank has some sort of collateral and they maybe wouldn't have written a personal unsecured loan for that same amount.
    myboys1976's Avatar
    myboys1976 Posts: 3, Reputation: 1
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    #3

    Jun 24, 2014, 08:34 PM
    OK thanks...
    smoothy's Avatar
    smoothy Posts: 25,492, Reputation: 2853
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    #4

    Jun 25, 2014, 05:32 AM
    Unsecured loans always have significantly higher interest rates because they lack any collateral that secured loans would have. Which is a result of the higher risk the lending institution is taking.

    They can be three times higher or more. Which is a significant amount.
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