Finova Financial

The Good

• Low APR rates of 18-30%
• No prepayment fee for paying loan early
• Same-day and next-day funding

Finova Financial offers secure loans on automotive vehicles that can be released quickly.  If you own a vehicle and need cash, your vehicle can serve as collateral for your loan (of course, this means they can take your vehicle if you don’t pay back the loan).  The advantage of Finova is that they will work with borrowers who have bad credit standing as long as you have a vehicle to pledge as collateral. They can lend from $500 to $5,000 which you can repay for a period of 12 months. The loanable amount will depend on both your credit profile as well as the value of your vehicle.  According to Finova, on average, a customer borrows $1,700 and qualifies for an APR of 22.5%.

Requirements

The following are required to be approved for a Finova secured loan:

• Must be 18 years old with a valid driver’s license
• Proof of income
• Proof of residency
• You must own the vehicle and have a lien-free car title
• Have adequate equity in your car
• Must not currently be in bankruptcy
• Must have a prepaid comprehensive and collision insurance coverage for the loan term

Application is easy using their website and get pre-qualified instantly. When you’re satisfied with the loan amount offered, you can complete the application by providing the documents needed. Finova offers same day and next day funding of loans.

Prepayment of loan is possible at any time and receive your vehicle title back without any fees.

How is an Auto Secured Loan different than a Car Title Loan?

A car title loan means that a lender can take your car (by taking the title) if you default on your loan.  APR rates can be as high as 300%, and the loan must typically be repaid in as little as one month or as much as six months.  A car title lender will also require a visit to you in-person.

Finova Financila lends at a lower APR rate, has payback periods of 12 months, and allows the process to be completed online with no in-person visit.  While they can still definitely take your car if you don’t pay them back, according to the company, they will offer payment plans to payback the loans before repossessing a vehicle.

The Bad

• Limited Availability
• Understand that you can lose your vehicle
• Significant costs if not holding comprehensive & collision auto insurance
• May include additional fee

Finova Funding is only available in the following six states:

• Arizona
• California
• Florida
• New Mexico
• South Carolina
• Tennessee

Assuming you are in one of these six states and own a vehicle, Finova could be a good option.  But borrowers need to understand that the only reason Finova – or any lender using vehicles as collateral – are willing to give you the cash is because they vehicle minimizes their risk.  They don’t want to take your vehicle, but in the event that you don’t pay, they could.  The vehicle has value, and it is some value MORE than the amount of the loan.   So borrowers need to make sure they can pay the loan payments each month, as losing your vehicle can mean losing a job or otherwise causing a real personal downward spiral.

Also, since your vehicle will serve as collateral, this means Finova requires the vehicle to be fully paid. If you have a vehicle that is still being paid off, you will not qualify. In addition, they will require proof of comprehensive and collision insurance coverage for the term of the loan. Some reviews from Finova customers mentioned that if you don’t have such a policy, you will be required to buy a debt cancellation addendum from the company, which is almost equal to the loan amount approved. This can greatly increase the cost of the loan and your monthly payments.

Fees

Here are some additional costs on top of the APR that you may incur with a loan from Finova Financial:

• $25 Fee – They call it an “investigative fee,” but it’s essentially a $25 flat-fee that everyone pays in order to receive their funds.
• “Debt Cancellation Addendum” – If you don’t have insurance, Finova requires that you purchase an insurance addendum from them.  This can almost double the cost of your payments.

The Summary

For fast cash, Finova is a good option compared to a car title lender. However, check into your other options – a secured loan from a bank or other lenders may not be as expensive. There are other alternatives for people who have a bad credit score when it comes to fast cash loans.  Finova’s APR ranges from 17% to 30% but that is for the loan itself. If you add the cost of the insurance addendum, the APR will skyrocket to almost 50% more, which will undeniably make your monthly payments high.