Keep and Pay

Keep and pay is a type of loan that allows the borrower to keep the title to their vehicle while they make payments on the loan. The lender holds a lien on the vehicle, which means that they have the right to take possession of the vehicle if the borrower defaults on the loan. Keep and pay loans are often offered by car dealerships, and they can be a good option for borrowers who have bad credit or who do not have a down payment.

There are two main types of keep and pay loans: open-end and closed-end. Open-end keep and pay loans allow the borrower to make payments as they are able, and the loan balance can increase or decrease depending on the amount of payments made. Closed-end keep and pay loans have a fixed loan balance, and the borrower must make a set number of payments each month.

Keep and pay loans can be a good option for borrowers who want to keep the title to their vehicle, but they do come with some risks. If the borrower defaults on the loan, the lender can take possession of the vehicle. Additionally, keep and pay loans often have higher interest rates than other types of loans.

Before taking out a keep and pay loan, it is important to compare interest rates and terms from different lenders. It is also important to make sure that you can afford the monthly payments. If you are not sure if a keep and pay loan is right for you, talk to a financial advisor.

Here are some additional details about keep and pay loans:

* The borrower is responsible for all maintenance and repairs on the vehicle.
* The borrower may be required to have full coverage insurance on the vehicle.
* The borrower may be required to provide proof of income and employment.
* The borrower may be required to make a down payment.
* The borrower may be required to sign a personal guarantee.

Keep and pay loans can be a good option for borrowers who want to keep the title to their vehicle, but they do come with some risks. It is important to compare interest rates and terms from different lenders before taking out a keep and pay loan.