Bad credit title loans and collateral loans are similar ways to borrow emergency funds when faced with urgent costs you cannot afford. While they have many similarities, there are key differences that can separate which one is right for you.

This guide from Carolina Title Loans, Inc. will explain the similarities and differences between bad credit title loans and collateral loans. We will also go over the title loan approval process so you can get insight into how to borrow emergency cash today.

Explaining Title Loans And Collateral Loans

Title loans and collateral loans are both secured loans, meaning you must offer up collateral to get approved. In the case of a title loan, you must have a fully paid-off car and use your lien-free car title as collateral. You can borrow bad credit title loans because you use collateral to secure the loan, meaning you don’t have to prove your creditworthiness.

A collateral loan is a more general type of quick-cash loan. It’s any loan that uses collateral to secure it. In most cases, collateral loans are secured with certificates of deposit, savings, investments, or other assets. Your credit score may also affect your ability to get approved.

The 3 Key Differences Between Bad Credit Title Loans And Collateral Loans

While these types of emergency cash loans have some similarities, there are major differences that can determine which is right for you. Everyone has a different financial situation and should seek a South Carolina loan that can help with their specific emergency. Learn about the differences between bad credit title loans and collateral loans below to determine which fits your situation best.

The following are the differences between bad credit title loans and collateral loans:

1. What Collateral Is Required

As mentioned earlier, bad credit title loans and collateral loans differ based on the collateral required for loan approval. Title loans use your lien-free car title, which is a vehicle title attached to a fully paid-off car.

Collateral loans use other assets, such as certificates of deposit, savings, or investments. For example, you could use your property to secure a collateral loan and borrow money. A bad credit title loan would be better for someone who has fully paid off their car, but those who haven’t can use other assets to secure a collateral loan.

2. The Credit Requirement

As you can tell by the name, there is no credit requirement for bad credit title loans. At Carolina Title Loans, Inc., we allow borrowers to gain title loan approval regardless of their credit score. We trust that you will be able to repay your loan on time and have your car title as collateral in case you fail to do so.

However, collateral loans at banks do have a credit requirement. You must prove your creditworthiness and ability to repay the loan on time if you wish to get approved. Your credit score will also determine your interest rate. Those facing a financial emergency who have suffered credit drops because of it may be better off borrowing car title loans because of the lack of credit requirement.

3. What Factors Determine Loan Amount

Both loans also have different ways lenders determine how much you can borrow. With bad credit title loans, your loan amount can be up to $15,000. How much you can borrow will depend on your car’s value. During an in-person meeting, a loan representative will inspect your vehicle to determine its value based on age, make, model, condition, and mileage.

Collateral loans require a credit check to determine their value. Lenders will look at your debt-to-income ratio to assess how much you can borrow. This is another situation where bad credit title loans would be a better option for those struggling with their credit score.

What Are the Benefits Of Bad Credit Title Loans?

If you are struggling to improve your credit score, a bad credit title loan is the better financing option for you. You can borrow money without needing a credit check and can receive your emergency funds in less than 24 hours. There is an easy title loan process that you can complete in less than 30 minutes, allowing you to quickly resolve your financial emergency.

The following are some of the benefits of bad credit title loans:

• No credit check required
• Quick access to emergency funds
• Get approved the same day you apply
• Begin the process online
• You get to keep your car during loan repayment
• The in-person process takes less than 30 minutes
• Use up to $15,000 for any emergency expense

The Lien-Free Car Title Requirements

One of the benefits of bad credit title loans is the minimal requirements you need to meet. Unlike bank loans that have a long list of requirements, we only need you to have a few items. You should be able to find these items quickly and use them to gain fast title loan approval.

The following are the lien-free car title requirements for title loan approval:

• Your driver’s license or another state-issued ID
• A lien-free car title in your name
• Your vehicle for a quick inspection

What Is The Easy Title Loan Process?

Borrowers can get approved for bad credit title loans after just a few easy steps with Carolina Title Loans, Inc. We keep the process simple and allow you to get approved in less than a day. You can get quick access to cash and resolve your urgent costs before incurring late fees, further reduced credit, or service disruptions.

The following are the steps in the easy title loan process:

• Fill out our online inquiry form
• Speak to a loan representative over the phone about loan terms
• Gather your required items and head to a South Carolina store location
• Have your requirements verified and your vehicle inspected
• Sign paperwork to complete the process
• Receive your title loan cash the same day you apply or the next business day

Apply Online Now For A Bad Credit Title Loan – Receive Up To $15,000 Today!

Now that you understand how a bad credit title loan is different from a collateral loan, you’re ready to move forward with Carolina Title Loans, Inc. We can help you get approved for emergency cash now, regardless of your credit status. You can borrow bad credit title loans in less than 24 hours and don’t have to worry about us reporting your loan to the major credit bureaus.

Start the easy title loan process today by filling out our online form. One of our friendly loan agents will explain how to get title loan approval over the phone.

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