Why Car Title Loans are an Alternative to Payday Loans

Borrowing money is not as easy as it used to be. Banks and credit unions have tightened up their standards, making credit increasingly difficult to obtain for the average consumer. Because of this restriction of credit, several alternatives have popped up, allowing individuals to access quick cash. Payday loans are an easy way to borrow money as long as you are employed. Another alternative is the car title loan, which has its advantages over payday loans. Let’s take a look at both.

Payday Loans

In order to qualify for a payday loan, you must receive a paycheck. In other words, you must have a job. The idea with a payday loan is that you offer your next paycheck as collateral to borrow money now. The process is very quick and easy. You can fill out an application and receive your money within an hour. If you only need a few hundred dollars, a payday loan might be a solution. If you are looking to borrow more, you are out of luck with a payday loan.

Car Title Loans

While similar to a payday loan, a car title loan offers a borrower the opportunity to borrow a few thousand dollars. To qualify, a borrower must own a vehicle. It is preferred that the car or truck is paid off in its entirety. Embassy Loans can still process a car title loan if there is a balance remaining on a car loan; it just depends on how much is owed.

A borrower must be able to prove that they own the vehicle. They must provide the title and the title must not have any issues. Once an individual applies for a car title loan, Embassy Loans requires some documentation, including the title, to process the loan. Like a payday loan, the process is quick. Many car title loans are completed within an hour. One of the reasons why the processing is so fast is that there is no need to check a borrower’s credit history. The loan is secured by the vehicle.

Lenders like Embassy Loans will allow individuals to borrow approximately 50 percent of the vehicle’s value. If you own a car that is paid off and it is worth $10,000, you could borrow up to $5,000. This is clearly an advantage over a payday loan.

The Verdict

If you own a vehicle and need to borrow more than a few hundred dollars, a car title loan can provide you with the cash you need. The process is quick and easy. You can get started by filling out an application. Embassy Loans even allows you to fill out an application online.