What's The Difference Between A Payday Loan And A Title Loan?
Need fast cash to cover an emergency expense? Two common options are payday loans and title loans, but they work very differently. Understanding the difference between a payday loan and a title loan can help you make the right financial choice.
This guide explains how payday loans and title loans work, their key differences, and how to choose the best option for your needs.
What Is the Difference Between a Payday Loan and a Title Loan?
What Is A Title Loan?
A title loan is a secured loan where you use your car title as collateral.
- Loan Amount: 25%-50% of your car’s value
- Loan Term: Short-term (typically 30 days)
- Requirements: Lien-free car title, ID, proof of income
- Best For: Borrowers who own a vehicle and need higher loan amounts
With a title loan, you can continue driving your car while repaying the loan.
What Is a Payday Loan?
A payday loan is an unsecured loan that provides a small cash advance based on your upcoming paycheck.
- Loan Amount: Usually up to $500
- Loan Term: 2-4 weeks (until your next payday)
- Requirements: ID, proof of income, an active checking account
- Best For: Borrowers who don’t have a car or need smaller amounts
Need fast cash? Apply for a payday or title loan today.
Title Loan vs. Payday Loan – Key Differences
- You wouldn’t have to put up any form of collateral to apply for a payday loan
Title loans are secured loans, and you can’t qualify for one if you don’t have a vehicle to use as collateral. You don’t need a valuable asset to get approved with a payday loan.
- You would typically be able to get a more significant sum if you go for a title loan
Generally, $500 is the maximum amount you might get approved for if you’re going for a payday loan. With a title loan, you can sometimes qualify for up to $15,000 if your car has a high value and is in good condition.
- You will need a blank check from an active checking account to take out a payday loan
For both types of loans, you must provide your ID and proof of income (your most recent pay stub). But you won’t need a blank check if you’re applying for a title loan, just a lien-free car title.
Which Loan Should You Go For?
You might want to choose a payday loan if:
- You don’t have a car
- You are still paying off your car
- You need only a few hundred dollars to take care of your financial emergency
You will benefit from a title loan if you have a vehicle with a lien-free title that is in relatively good condition and you want to try to qualify for thousands of dollars.
Why Choose Title And Payday Loans?
Finding the right lender might be challenging regardless of the type of loan you decide to opt for. There are too many scammers out there, and you can easily spend hours, if not days, on vetting the lenders in your area.
You wouldn’t have to do that if you decide to work with Title and Payday Loans. We are committed to helping you get the money you need quickly. The representatives would promptly connect you with a reputable lender to save you valuable time.
Fill out an online inquiry form with some basic information, and after reviewing your application, the Title and Payday Loans agent will pass your data over to a suitable licensed lender located close to you. The lender would then call you to answer all your questions.
By the way, if you decide to take out a title loan, you wouldn’t even have to drive to the store – the verification agent would come to you to perform a car inspection and determine how much you qualify for.
Get Your Fast Cash Today!
Whether you need a payday loan or a title loan, Title and Payday Loans can connect you with the right lender quickly. Fill out our online form to get started and find the best solution for your financial needs.
Apply for a payday or title loan now! Start here.
Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.
