Debunking 7 Top Caveat Loan Myths
Among short-term financing products, caveat loans have gained popularity over the years as a go-to financial solution for individuals and businesses requiring speedy approval and quick access to funds for their immediate financing needs. But despite this popularity, a lot of confusion about this type of financing option still exists, creating confusion and misconceptions that can discourage you from exploring the benefits of caveat loans.
So let’s explore these so-called myths and shed light on irrefutable financing facts.
Myth #1: A Mortgage and a Caveat Loan are the same.
False: While both employ property as collateral for the loan, both are vastly different. A mortgage allows the lender to repossess the property and sell it to repay the loan upon default. A Caveat only places a notification on the property title, preventing the owner from selling the said property with an unpaid loan.
Myth #2: A Caveat will make it hard to sell your property in the future.
False: While a caveat will indeed prevent you from selling your property while the loan is still active and unpaid, it can easily be removed in less than an hour when you pay the loan in full. The restriction on your title is temporary and will not affect the future status of your property.
Myth #3: Caveat Loan interest rates are better than conventional loans.
False: Compared to interest for mortgage and other banking loans, caveat loans have higher interest rates but are offset by the benefits of having your loan application processed faster, with higher approval rates and even quicker release of funds. Thus, the increased interest rates are negligible because you get immediate access to funding for emergencies, business opportunities and other time-critical financial issues that conventional loan application processes could delay.
Myth #4: A Caveat on your title will allow the lender to sell the property when you default on your payment.
False: Unlike a mortgage, a caveat does not allow the lender to repossess your property if you default. The caveat will only block the sale of the property encumbered with an unpaid loan, effectively securing your property in favour of the lender.
Myth #5: Caveat loans are hard to get and take too long to process.
False: Unlike traditional bank loans, caveat loan applications are processed quickly – within 24 hours or less in typical cases, which makes this type of loan among the fastest and easiest to secure, making it the top choice for borrowers with immediate funding requirements.
Myth #6: Bad credit and debt issues will prevent you from getting a caveat loan.
False: While bad credit and debt issues can be a burden and prevent you from getting a loan from banks, it does not automatically affect you negatively when you apply for a caveat loan. You are good to go as long as you have a property under your name to use as collateral.
Myth #7: Caveat loans require just as much documentation as bank loans.
False: You only need two documents to attach to your caveat loan application: proof of identification and a property title in your name. Provide these two, and your application can proceed without further delays.
Conclusion:
As with any financial decision, borrowers like you should consider all facts to make an informed decision that can affect your future. Understanding how caveat loans can be a valuable tool is the first step towards your loan literacy and a more favourable financial outlook.
Because we understand the subject of loans and financing products can be highly technical, Tiger Finance is always ready to help you improve your financing prospects with expert advice to guarantee fast, hassle-free approval and quick access to the funding you need.
Contact us today, and let us help secure that loan for you.
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