1. Is it okay to pledge your parents’ car for a private loan?

It is okay to pledge your parents’ car for a private loan, but you should pay attention to the mortgage loan contract

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Because it is a private loan, the mortgage loan contract must indicate the name and quantity of the collateral. If it is a car, the model, license plate number, engine number and other information must be indicated. In addition, in the loan contract, it must be clear that the borrower is the legal owner of the vehicle. It must also be clear how the car will be kept during the loan period, whether it is kept by the borrower or the lender, whether by escrow or not. How to escort the car, etc. These must be reflected in the contract.

Control of loan limit. If the loan amount applied for by an individual is large, it may not be available immediately. In this case, you will not be able to apply for a loan on the same day. Therefore, if you want to apply for a car mortgage loan that can be disbursed on the same day, it is not suitable to apply for a large amount of loan.

The factor of car depreciation should be considered

When using a car as a mortgage loan, the lender must consider the current appraised value of the vehicle and subsequent depreciation to determine the loan amount. Formal Lending institutions usually lend up to 60-70% of the vehicle's appraised value, which can be used as a reference for private loans.

After applying for a car mortgage loan, the lending institution has the right to dispose of the collateral in advance if one of the following incidents occurs during the mortgage period.

2. What are the circumstances for realizing the mortgage?

The borrower is declared missing and his property custodian refuses to perform the loan contract;

Borrowing The person loses the capacity for civil conduct and the guardian refuses to perform the loan contract;

The borrower dies or is declared dead and the legal heir of his property refuses to perform the loan contract;

The debtor fails to perform his repayment obligations or has other behaviors that lack sincerity in repaying the debt;

The borrower is involved in or will be involved in major litigation or arbitration proceedings and other legal disputes that will affect the Repaying ability;

If the borrower changes his residence, mailing address, contact number, etc., and fails to notify the borrower promptly within 5 days.

In contemporary society, there are currently some disputes in private lending. The two parties can first resolve it privately. If there is no way to resolve it privately, they can also proceed through litigation. However, we still need to remind everyone that when establishing a creditor-debt relationship, you can ask the other party to provide a guarantee.