The Difference Between Auto Title Loans and Regular Payday Loans

3 Minutes Read

If you need money and are looking for a way to borrow it, regular payday lender can be your option. Since there now many payday lenders, it is difficult to know who the best to meet your needs is.

However, if you are facing an emergency, you will not like to find a lender who requires long application process and credit checks. This suppresses most personal loans and bank loans from major lenders. Therefore, you have only two viable and main alternatives that remain in your hand: payday loans and auto title loans.

You have, more than likely, heard of both regular payday loans and auto title loans. However, many consumers do not understand that the two options have quite differences. Many differences between a payday loan and an auto title loan are specifics. If you want to obtain an auto title loan, you have to place, as security for your loan, a clean car. Typically, the lender will not conduct a credit check in your financial situation. With an auto title loan, you can borrow an amount of money up to the current value of your clean car. Such loan enables you to secure a low rate of interest.

On the other hand, regular payday loans do not require collateral such as a car in order to secure the loan. However, the lender will limit the amount of the money you can borrow. With a payday loan, the higher amount of money you can borrow is close to your monthly income and most of time, such loans come with high rates of interest.

Since you know the differences between auto title loan and regular payday loan, it is up to you to assess both options according to your current needs and situations. If you decide to take an auto title loan, you have to be sure that you have a clean car that does not have any lien holders. This means that you do not have any debt on your car, you paid off the entire money on it and the car belongs to you with your name on it. This is the main requirement for receiving an auto title loan. Once you meet this requirement, you can obtain the loan you need in short time.

With a payday loan, even if you do not have a car, you can obtain the cash but only a limited amount.