Differences Between Car Title Loans, Personal Loans, And Payday Loans
Different Types of Loans
If you need to get some fast money, car title loans, payday loans, and personal loans are great options for you to get the money that you need.
- Payday loans: This is a loan that is an advance on your future paycheck. They generally have a higher interest rate and are to be paid back when you receive your next paycheck. They are generally small-dollar loans
- Car title loans: These loans use the equity that you have in your vehicle, the terms are on average 24 months with no prepayment penalties. They have competitive interest rates and can offer larger dollar loans.
- Personal loans: This loan is generally through a bank or a private finance company, and the money borrowed is usually paid back over several years with a fixed interest rate. they can be harder to qualify for.
Details on Payday Loans
If you need some fast cash for an emergency before you receive your next paycheck, you may want to get a payday loan. The payday loan needs to be paid back within about two weeks, or by the time you receive your next paycheck. You may also be able to roll the payday loan to pay later for a small fee.
To qualify for one, you will complete an application, they can approve you very quickly, and then you will have to sign the loan documents.
After you receive your cash with your payday loan, you will need to repay it, plus whatever fees and interest. You can also roll it over, to extend the terms, this can become more expensive.
Requirements will vary from lender to lender, you will need to be over 18, have a checking account, show proof of employment, and have a working telephone number.
If you default on a payday loan, it will affect your credit score. You may also have garnished wages and it will affect your credit and your ability to get another payday loan in the future.
Details on Car Title Loans
A car title loan is a secured loan by using the equity that you have in your vehicle. The title loan company will hold the title of your vehicle as security until the title loan is paid off. If the car title loan cannot be paid back, the title loan company will retain ownership of the vehicle, and sell it to get their money back.
You continue to use your car while you pay back your car title loan, as long as you make your payments you can continue to use your vehicle.
If you are searching for a car title loan near me, we have a large referral network, so we can help you no matter where you are living. You can get cash for your car, motorcycle, or RV, by using the equity that you have in them.
With a car title loan, your car equity becomes your credit, so your credit score is not so important, as long as you have the equity in your vehicle, and proof of income to support it, we can get you approved.
you can apply for title loans online, and get approved instantly, and get the same-day funding that you are looking for. the dollar amount will depend on the equity that you have in your vehicle.
Details on Personal Loans
If you have good credit, getting a personal loan might be a better option for you, but the process will take longer to get approved, personal loans are good if you have high credit card balances, you can consolidate them into one payment at a lower rate.
Personal loans are similar to bank loans, so the underwriting and requirements are more difficult to qualify for than payday loans and title loans.
With personal loans, you will get a lower interest rate than with a payday loan or a car title loan, but they are much harder to qualify for, and the underwriting process takes longer to know if you have been approved.
Personal loans will have a loan term ranging from 24 months and up, you will have to make your monthly payments.
Different Benefits For Each Loan Type
All three loans have their own benefits, with car title loans and payday loans, the approval process is fast, you will be able to find out how much you have qualified for within minutes.
Both car title loans and payday loans have higher interest rates than personal loans. With car title loans there are no prepayment penalties, so you can pay it off at any time. Both are not credit-based loans, so bad credit will not prevent you from getting a car title loan or a payday loan.
The personal loans application process is much more extensive and is credit-based, so for people with bad credit, it will be difficult to qualify for.
Personal loans will have a lower interest rate and can be repaid over a longer period of time, so the payments will be lower.
Choosing the Loan for You
There are no right or wrong answers for your car title loan, payday loan, and personal loan comparison, it will really depend on what is the best fit for you.
Here at TFC Title Loans, we are always trying to provide you with the best loan information, if you need an auto title loan, you can apply with us, we have the largest referral network in the nation, and all of the title loan companies that we work with are in compliance with the CFPB, so you know you will be working with a trusted company.
Contact us today, we are here to answer any of your questions, and we will take the guesswork out of finding the right title loan company for you.