What Is The Difference Between Car Title Loans And Payday Loans?

When you're in a financial pinch, two common options to consider are car title loans and payday loans. These loans can provide quick access to cash and are available at Title and Payday Loan locations across the U.S. But what’s the difference, and how do you know which is right for you?

Both title loans and payday loans offer fast solutions, but they differ significantly in loan amounts, requirements, repayment terms, and application processes. Let’s break them down to help you decide.

Comparing Car Title Loans vs. Payday Loans:

Amounts You Can Borrow

Car title loans are generally larger than payday loans, ranging from $300 to $15,000. These loans are great for larger expenses, like car or home repairs, or medical procedures.

The total amount you can receive from a car title loan is determined during the in-person process. Our knowledgeable representative will consider your financial needs, loan request, and – most importantly – your vehicle. The vehicle used to secure the loan will be inspected quickly to note its overall condition, mileage, brand, and year. The newer the car and/or the lower the mileage, the higher the potential title loan amount.

Payday loans, on the other hand, are ideal for smaller emergency expenses. Many customers use them to cover overdue monthly bills, such as utilities. They are given for amounts up to $1,200 depending on your needs, loan request, and employment status.

Title Loans Require Collateral, Payday Loans Do Not

Car title loans are secured loans, meaning they require collateral. Luckily, the collateral is simply the lien-free title for your vehicle, not the car itself. This means that, if approved, you get to keep your car and use it normally so long as the loan is repaid on schedule.

To qualify, the title must be lien-free, meaning it is not being used as collateral for any other loan and that the car is paid off and legally under the loan applicant’s name. No other entity can have a claim to the vehicle.

Alternatively, payday loans are unsecured loans. This means they don’t require any collateral to apply. This is precisely why your income and financial situation is taken so importantly.

Repayment Terms: Title Loans vs. Payday Loans

Car title loans are usually given over a few months; however, this will depend on the agreement you sign with your trusted loan rep. If you own a vehicle, need a little extra cash, and would prefer to repay it over time, car title loans may be best for you.

For those who prefer to get a smaller, short-term loan and repay it as soon as possible, payday loans are more up their alley. Typically, they are repaid on your next payday the following month or even a couple of weeks later. Again, this is negotiated during your loan process and when you confirm the loan.

How To Qualify for Car Title Loans and Payday Loans

Qualifying for both of these loans is easy through Title and Payday Loans, but the processes do differ.

To apply for car title loans, you’ll need:

• Your state-issued photo I.D. (driver’s license, non-driver’s license, or passport I.D.)
• The lien-free title to your car
• Your car for an inspection

Have more questions about title loans, check out our FAQs page.

To apply for payday loans, you’ll need:

• Your state-issued photo I.D. (driver’s license, non-driver’s license, or passport I.D.)
• Your latest paystub
• Your latest bank statement and a blank check from that same account

Have more questions about payday loans, check out our FAQs page.

If you are unsure if you meet the requirements for one of these loans, connect with one of our staff to confirm. We may be able to find an alternative for certain documents, depending on your situation.

The Loan Request Process

Applying for both types of loans through Title and Payday Loans is simple and pain-free. We know that our customers need cash fast. Unlike big banks that require applicants to jump through hoops, we want to make the process as quick and easy as possible.

Both title loan and payday loan applicants should begin the loan process by filling out the request form on our homepage. We will then reach out to the number provided to discuss your financial situation and documentation.

Both types of loans will require an in-person meeting to dot your i’s and cross your t’s. Depending on where you live, some car title loan offices will meet you at the location of your choosing while others will request to meet at their office. All payday loan applicants will need to meet at a local office.

During the meeting, our rep will look over your documents, inspect your vehicle for title loans, and determine the potential loan amount. If approved, you’ll get your cash that day or the next business day.

Access Your Loan Today

Both car title loans and payday loans have been used across the U.S. to help thousands facing financial emergencies. Whether you need cash to pay a bill, cover housing costs, fix your car or home, or for another expense, we’ve got your back.

At Title and Payday Loans, we make accessing fast cash a breeze. We make getting quick cash easy with both title loans and payday loans. Not sure which loan is best for you? Reach out to us online and we’ll help you navigate the right choice for your financial needs. Apply on our homepage and we will have a local representative reach you today. We’re waiting to hear from you!

Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.