Everyone at some point in their life has to deal with a short term cash emergency. When this happens there are often only a few options. For some people, they are fortunate enough to have someone that they can count on to lend them some money in the short term. For others, this just is not an option that is available. Two common choices in this situation are the car title loan and the pay day loan. Both can help in the short term, but it is good to first take a look at the differences in order to make a more educated decision for this financial crisis.
What is a Pay Day Loan?
The pay day loan is an unsecured loan. Most lenders advertise that they do not do any sort of credit check. Instead, they ask for a driver’s license and then do an employment verification. Once they confirm that you are currently employed they will then approve you for a small loan. This is typically available within 24 hours or the next business day. Unfortunately, the rates tend to be very high, and the penalty for not paying back the money on your next payday can be extreme.
What is a Car Title Loan?
A car title loan is secured with the actual car title. That means that there is risk that is associated with this type of loan. If you are unable to pay back your loan, then the debt holder has the right to take possession of your car. The upside to this type of loan is that the interest rates are much lower than a payday loan. Also, most car title loans do not require any credit checks. They understand that holding your car title means that you will promise to pay.
There is another advantage to a car title loan versus the pay day loan. Most pay day lenders have restrictions set for the initial loan. Typically this is set at $500. Often, this is not enough to handle a major emergency like a car repair, a medical bill, or even a death in the family.
With a car title loan, there is no preset limit set for the amount of money that you can borrow. It only depends on the total value of the car. There is no restriction set for first time borrowers either. That means that if you need a loan for the maximum value of your car, you can get it, even if it is your first loan.
So, if you find yourself needing some emergency cash, a car title loan can get you more money and a cheaper rate. For more information, get in touch with the title loan leaders, Embassy Loans. They can get you the money you need today.