Payday Loan Providers vs. Car Title Loans: Which One Works For You?

What types of loans would work best for you? There are car title loans and there are also payday loans. An ideal example of a good loan company is the one that provides choices to service their customer’s needs as best as possible. The two types of loans do not make credit checks to determine approval status and they’re both alternative loans. Although they are very different. It’s important for you to know how the two loans works. When you’re looking for quick cash, it’s essential to find the best service that fit your condition.

Car Title Loans

These loans are secured by personal property like collateral. In this case, your vehicle is what secures a car title loan. To qualify for this kind of loan, you must own the car title or pink slip. The loan amount is based on the resale value of the vehicle. Your loan will only be approved for a percentage of that amount. You’ll get your money the same day and continue to make use of the car. Unlike pawnshops that keep your property at the store, you’ll keep possession of the vehicle.

Loans are usually due within 30 days. It gives you more time than an average of 2 weeks which payday lender offers it borrowers. You’ll need that time since these loans are often larger than their payday counterpart. The interest rate is high and the full payoff may prove difficult. Therefore, do not avoid the loan payment. You’re better off working with the lender to work out a payment plan rather than risk your vehicle. Secured loans in default will collect the collateral to sell and fulfill the terms of the loan.

Payday loans

These loans are not secured. There is no collateral involved, just a contract to pay. The loan amount is based on monthly income. As long as you have not defaulted on other payday loans, the approval process is easy. The payoff is based on the applicant’s pay cycle. The term for payday loans is about 2 weeks. With storefront lenders, money is received the same day and a post-dated check is left to cover the future payment. Online lenders will transfer money into your bank account in the next business day. They will automatically withdraw the payment on the determined payment date. Both processes work effectively and efficiently.

If you default on this loan, it will get sold to a collection company. This means that the debt will end up making your credit history a bad debt. What started without credit check will end up hurting your credit if not paid properly. Do not ignore the debt, talk to your lender and work something out so you can make good use of your loan.

Since these the payday loans and car title loans carry high finance charges, they should be regarded as last resort money. When you’ve turned over every other stone and came up dry, alternative money will help you. Why save them for last? The short terms and high-interest will sometimes be tough for getting resolution. Money help should never hurt.

Which Loan Will Work Best For You?

You can consider the two options. Many applicants do not own their car outright and end up applying for payday loans. If you need a larger loan and you own the pink slip, you may find out that a title loan would suit your financial needs. Whichever you select, ensure you follow up the application while creating a payment plan. You want the loan to help, therefore make use of the short time you have to gather the funds needed to pay the loan and the fees completely.