Secured Loan
"A secured loan is a loan in which the borrower pledges some asset (e.g. a car or property) as collateral for the loan, which then becomes a secured debt owed to the creditor who gives the loan. The debt is thus secured against the collateral - in the event that the borrower defaults, the creditor takes possession of the asset used as collateral and may sell it to satisfy the debt by regaining the amount originally lent to the borrower. From the creditor's perspective this is a category of debt in which a lender has been granted a portion of the bundle of rights to specified property. The opposite of secured debt/loan is unsecured debt, which is not connected to any specific piece of property and instead the creditor may satisfy the debt against the borrower rather than just the borrower's collateral." - Wikipedia
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Simply put, those movies where the bank comes and takes the car away. That's how something like that may happen. It might be better to just sell the car yourself and use that cash instead of pledging a vehicle as collateral for another debt. Reality is, at any time when you default the lender (bank) has the right to re-po your vehicle, and that could make your situation even worse. I wouldn't leverage my vehicle unless it was something i could do without. If that was truly the case, i would sell it and use the cash to pay off debt, and save on auto ins, gas, maintenance, registration, and various other expenses that come with a vehicle.
Unsecured Loan
However better than an unsecured loan where "the creditor may satisfy the debt against the borrower rather than just the borrower's collateral." Yikes that when they take whatever they can until the debt is satisfied. Either way both don't seem like a happy ending.
Quick Loan
Quick loans can be just as bad if you don't have a game plan. The interest rates on those are not meant to be used. Most just have a flat fee that covers the time the initial loan is set for. Make sure you have plenty of leeway to pay that debt off, or you would end up worse then you started.
Find A Solution
If it ever gets to this point there must be another solution. Are you spending less? Are you spending more on your late fees then on your other expenses? You need a game plan, and plan of action that will get you out of this downward financial spiral.
Make More, Spend Less
Most of the time you simply need to make more money. Sometimes working three jobs isn't as good as giving one job your full attention, then spending time making dinner instead of getting take out. If needed live of tuna casserole for a few months, and walk or take the bus to work. I've done it, and the exercise you get from walking or running (in the rain) is more then enough to burn off those extra carbs. You'll soon find yourself on the flip side and be able to re-purchase a newer vehicle. Especially if you avoid damaging your credit.
Long Term Solution
Make sure to always consider the long term solution, and make sure that your immediate choices are helping you get there. I also wouldn't hesitate to look around at another jobs. You would be surprised at what other jobs are even a better fit for you. Either the schedule is more flexible possibly saving some money in daycare expenses, better benefits saving money in medical expenses, nicer people to work with saving money on pain killers, and of course the biggest solutions is higher pay.
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