Car Title Loans in Hanoi: Financial Solution or Debt Trap?

“Sell my truck or get a title loan?” This question kept Tuan, a grocery store owner on Tay Son Street, awake for nights. His business needed a large sum of money to stock up for Tet, but selling his trusty Hyundai H100 truck felt like a huge loss. Following a friend’s advice, he looked into car title loans. Could this be the solution to his financial dilemma?

Car Title Loans in Hanoi: Pros and Cons

A car title loan is a type of secured loan where you use your car’s ownership documents (registration certificate) as collateral to borrow money from a bank or financial institution. You can continue to use your vehicle normally. This type of loan offers several advantages:

• Simple procedures, fast disbursement: With complete documentation, you can receive the loan within 24-48 hours.
• Competitive interest rates: Lower than typical unsecured loans.
• High loan amounts: You can borrow up to 70-80% of the car’s value.

However, there are also some disadvantages:

• Risk of vehicle repossession: If you fail to repay the loan on time, the bank can seize your vehicle.
• High penalty interest rates: Late payments mean you will incur very high penalty interest rates.