Title Loans vs. Payday Loans: How Are They Different?
December 2, 2020 | Emma Frost
If you’re ever in a situation where you need to borrow money quickly, you’ll find that you have all sorts of choices. These days, the financial services industry provides many different ways for borrowers to get a loan depending on what suits their situation the best.
Two of the most popular options for borrowers are payday loans and title loans. These unique financial products might look the same at first glance, but they have one significant difference: payday loans are those that you secure with your income or salary. Title loans, on the other hand, are borrowings that you secure with the title to your car.
Before you pick one or the other, you must understand the subtle differences between the two. That’s what we’ll cover in this article: you’ll see the benefits of both and decide for yourself which one suits your needs the best.
What is a Title Loan?
A title loan is a form of borrowing that you secure with the title to your car. You might be able to use a title to a different vehicle as well like a boat, motorcycle, or RV. The maximum amount you borrow will depend on the value of the vehicle.
What Do You Need to Get a Title Loan?
Applying for a title loan is a very simple and easy process. You’ll need only three things to apply for a title loan:
- Driver’s license or state issued I.D.
- Lien-free title to your vehicle
- Vehicle inspection
What are the Benefits of Carolina Title Loans?
Title loans offer a wide range of benefits and advantages over other forms of loans. They include:
- Carolina Title Loans will work with you no matter your credit score: good, bad, or even if you don’t have one at all.
- That car that you put up as collateral? You can still use it every day as usual.
- Quick application process and payout. You could get your money within the same day.
What Can I Use a Title Loan For?
You can use a title loan for anything you want. There are no restrictions placed on how you use the money that you receive. However, title loans are usually ideal for financial emergencies. So, people tend to use title loans for things like:
- Emergency medical procedures: for themselves, their kids, or maybe even the family pet.
- To catch up on overdue bills and avoid eviction or disruption in services like power, water, or gas for the home.
- To travel and be with family members during times of sickness or if a relative passes away.
What is a Payday Loan?
A payday loan is typically a short-term loan for relatively smaller amounts. Those amounts will depend on how much you earn through your salary.
What Do You Need to Get a Payday Loan?
Some of the basic requirements include:
- Being at least 18 years old with a driver’s license or government issued I.D.
- Your most recent pay stub
- A blank check from an active checking account in your name
What are the benefits of payday loans?
Payday loans are a popular option for many people because of the convenience that it offers. While there are many other benefits, here are some of the top reasons people sometimes prefer payday loans:
- Fast application and payment process. Applying for and receiving a payday loan takes hours, at most.
- Low credit requirements. The amount that you borrow depends on how much of an income you have. Some places don’t even check your credit score at all!
- Freedom. There are no limitations on how you can use the money you borrow. It’s yours to do with as you please!
While they both offer advantages, title loans can be an easier option since you don’t need to worry about employment and you can receive a larger loan. Contact Carolina Title Loans today to get started on your loan!