The Differences between Car Title, Personal, and Payday Loans

2nd-job1In the world of short term loans, most people are unaware of the differences between the different types. Personal loans, car title loans, and payday loans all have their advantages and disadvantages. People looking for emergency cash solutions often do not take the time to understand the differences between the three.

 

Personal Loans

There are different types of personal loans, but most will fit into one of two categories: personal loans from traditional lenders like banks, and no credit check personal loans issued by other lenders. When you borrow money from your bank, you will undergo a credit assessment to determine whether or not you are a risk. If the bank sees that you are a good candidate to repay the loan, you will be granted the loan. If not, you are left looking for other avenues.

 

There are no credit check personal loans available; however, these are usually from lenders that are not traditional financial institutions. What that means is they do not have to follow many of the rules and regulations that apply to banks. They can charge exorbitant interest rates and really amount to glorified cash advances.

 

Payday Loans

You have to have a job and steady stream of income to obtain a payday loan. You write a personal check for the amount you want to borrow plus the fees. The lender will give you the amount of the loan, usually within an hour, and holds the check until the loan is due. You pay the loan off, or you can extend it, which will mean more fees. Payday loans are not based on credit checks, and they can be a quick way to borrow a few hundred dollars.

 

Car Title Loans

Car title loans are secured by a vehicle. Most lenders, like Embassy Loans, prefer the vehicle to be 15 years old or less and in good condition. You must have the title, and the car or truck should be paid off completely. You can still borrow if you owe on the vehicle, but most lenders prefer it to be owned free and clear.

 

Like payday loans, car title loans are not based on credit; there is no need to check an individual’s credit history. If the borrower fails to pay his or her debt, the lender can take the vehicle as payment and then sell it to recoup any losses. If you are looking for a quick way to borrow the money you need, Embassy Loans can process your loan and give you your cash within an hour.