What's The Difference Between A Payday Loan And A Title Loan?

When you need fast cash, payday loans and title loans are two options that might come to mind. However, these loans have significant differences in terms of how they work, what you need to qualify, and how much you can borrow. Understanding these differences can help you choose the right loan for your financial situation.

Discover The Differences Between A Title Loan And A Payday Loan

What Is A Title Loan?

A title loan is a secured loan that allows you to use your lien-free car title as collateral to access a part of its cash value.

To take out such a loan, you would have to give the title to your vehicle to the lender in exchange for the loan amount. With a title loan, you typically get between 25% and 50% of your car’s worth if approved.

Car title loans are typically short-term loans, meaning they must be repaid within 30 days. However, the exact timeframe might vary from lender to lender, so check the loan agreement.

What Is A Payday Loan?

A payday loan is also a short-term loan you would be asked to repay within 2-4 weeks. Most borrowers can pay off the loan amount with their next paycheck.

You are usually offered a portion of how much you will get paid, so the amount you qualify for depends on your earnings.

What Are The Differences Between A Payday And A Title Loan?

• 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.

 

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