Title Loans versus Payday Loans: Understanding the Difference

by | Jun 5, 2014 | Finance

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When you need money in a hurry, you have two basic options: a title loan or Instant Approval Payday Loans Online. However, do you really know the difference in the two? When you choose to take a title loan, you need to be sure you understand what is at risk. While it may seem like a great way to get the cash you need when you own a vehicle and have a clear and free title, you will need to be certain you are willing to part with the vehicle if you are unable to repay the loan in full.


There are a number of individuals that have realized that acquiring a small loan using their car title is convenient. If you are extremely certain that you will have the ability to pay off the money that you borrowed plus the fees, it may not be very risky at all. Most people start out with the right intentions, but in many cases the situation does not turn out as expected.


Before you can take your car into a location to receive a title loan, you have to be certain there is no outstanding debt on the title. You will also be required to have full coverage insurance.


A payday loan does not require this type of collateral. In fact, you do not have to put up any of your personal property, at all, to receive a payday loan. The process is clear and simple and involves you supplying your basic information, such as proof of age, employment information and active bank account. You will also not have to undergo any type of credit check to secure the funds that you need.


A payday loan is also able to be renewed and rolled-over if you are unable to pay. While this comes along with additional fees and interest, you will not run the risk of losing your vehicle if you are not able to pay in a timely manner. This means that if you are in need of cash for a short period of time, a payday loan may be the right choice for you.


No matter what you decide it is important to consider all of the options and benefits of each. This will help you to make an informed decision about what loan is right for you and your particular needs.



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