Then you’re likely to encounter the term “lien,” but the chances you’ll know what it means may not be so great if you’ve been approved for a car loan.
A lien on an automobile is similar to a protect for the lending company or any other party that is interested. Whenever you sign up for an auto loan, a lien is made, which will be a lender’s appropriate right to control associated with the car through to the loan is paid back.
This means if you default from the mortgage, like failing woefully to make payments, the financial institution can repossess the vehicle, which will act as their security.
As the loan is guaranteed resistant to the automobile, the lienholder may also insist the asset is protected, and so the debtor is generally necessary to sign up for full insurance plan – both collision and comprehensive insurance coverage. Continue reading “What exactly is a lien on a vehicle?”