What kind of loan would work best for you? There are payday loan providers that also provide car title loans. A perfect example of a company is one that offers choices to service their customer’s needs as best as possible.
The two types of loans are both alternative loans and do not make credit checks to determine approval status. They are very different though. It is important for you to understand how the two loans differ. When you are looking for fast cash, it is important to find the best service to fit your personal situation.
Secured loans – These loans are secured by personal property as collateral. In this case, your vehicle is what secures a car title loan. In order to qualify for this particular loan, you must own the title or ‘pink slip’.
The loan amount is based on the resale value of the vehicle. Your loan will only be approved for a portion of that amount. You will get your money the same day and continue to have use of the car. Unlike pawnshops that keep your property at the store, you will keep possession of the vehicle.
Loans are typically due 30 days later. It gives you a bit more time than an average two week payday loan. You will need that time since these loans are most often larger than their payday counterpart. The interest is high and the full payoff may prove challenging. Don’t avoid payment. You are better off working with the lender to work out a payment plan rather than risk your car. Secured loans in default will collect the collateral to sell and fulfill the terms of the loan.
Payday loans – These loans are unsecured. There is no collateral, just a contract to pay. The loan amount is based on monthly take home income. As long as you have not defaulted on other payday loans the approval process is very easy. The payoff is based around the applicant’s pay cycle. On average, the term for payday loans is approximately two weeks. With storefront lenders, money is received same day and a post-dated check is left to cover the future payment. Online lenders will transfer money into your bank account by the next business morning. They will automatically withdraw the payment on the determined payment date. Both processes work very smoothly.
If this loan goes into default, it will get sold to a collection company. This means that the debt will end up on your credit history report as bad debt. What began as a no credit check loan will end up hurting your credit if not paid correctly. Don’t ignore the debt, talk to your lender and work something out so you can make good on your loan.
Since these loans both carry high finance charges, they should be viewed as last resort money. When you have turned over every other stone and came up dry, alternative money will help. Why save them for last? The high interest and short terms will sometimes be tough to resolve. Money help should never hurt.
Which loan will work best for you?
Take both into consideration. Many applicants do not own their car outright and end up applying for payday loans. If you need a larger loan and do own the pink slip, you may find that a title loan would suit your needs. Whichever you choose, make sure you follow up the application with creating a payment plan. You want the loan to help, so use the short time you have to gather the funds necessary to pay the loan plus fees in full.