While short term cash loans come in many different shapes and sizes, a person in need of emergency cash has essentially three choices: a car title loan, a pay-day loan and a credit card advance.
An auto title loan, not unlike a home mortgage, is a secured loan. That is, to get the loan from the lender, the borrower uses his vehicle title as collateral. You pledge your car in exchange for the cash; if you fail to keep your promises, the lender has a way to get repaid. Pay-day loans and credit card advances, on the other hand, are unsecured (no collateral) loans.
When a lender has a secured asset (in this case a vehicle title) he assumes less risk. As a result, the process of taking out a car title loan is fast and hassle-free. Title loans require no income or credit checks and only minimal paperwork. It is important to remember, however, that this is a secured loan; easier to get, but it is very important to stay current with the payments.
Pay-day loans are a different story. They are unsecured (no collateral) loans. If a borrower were to default on a pay-day loan, the lender would have less to fall back on. That means his risk is higher, and as a result, the borrower will pay a higher interest rate and have a shorter loan. Additionally, to mitigate his risk, a lender will take the time to verify income and employment before granting a pay-day loan.
Credit card advances come with a few strings attached. To be eligible for an advance on a credit card, a person must first pass the credit screen required to obtain a card. Even if a borrower is eligible for a credit card, he can expect to pay a fee equal to 2% to 4% of the amount of the advance. Finally, unless the borrower has a stellar credit rating, he will likely end up with a higher interest rate than he would with a title loan.
When a person needs cash fast, it’s important to not only find a loan quickly, but to pick one that is right for you. When a person finds himself in this situation, an auto title loan can provide much needed financial peace-of-mind. Title loans, on average, have lower interest rates, longer terms and are for higher amounts than either pay-day loans or credit card advances.
Embassy Loans, the leading provider of auto title loans in Florida, makes the process of getting a car title loan simple and fast. All that’s needed is a clear title to a vehicle and proof of residency. With customer service that is second to none, getting emergency cash through Embassy Loans is the easiest way to go.