There are many options available when you are looking for money when times are tight. Two of the most popular options are payday loans and car title loans. These loan alternatives are secured loans that can provide cash relatively fast. To help you make a better decision on what option is better for you, here’s some information about Payday Loans vs. Car Title Loans.
Payday loans use the promise of your next paycheck as security for the loan. Payday loans use post-dated checks that will be deposited on your next payday or electronic funds transfer as collateral. The amount of loan depends on the amount of your next paycheck. Payday loans typically range from $100 to $1,000. Other highlights of a payday loan are:
- Short Terms – usually 2 weeks – or the next pay period for repayment
- Low loan amounts – Usually no more than $255
- Interest is a flat fee per $100 borrowed
- Average APR 390% (based on $15 per $100 – two weeks) not including any additional fees
- Must have employment and bank checking account
One of the key differences in comparing payday loans vs. car title loans, is that you can typically borrow more money with a car title loan.
Car Title Loan
Car title loans are secured loans that use the equity of your car as collateral for the money you need. With a car title loan you can borrow between $2,000 to $50,000 depending on the state you live in and the amount of equity you have in your vehicle. Many vehicles can be put up as collateral including cars, motorcycles, trucks, work trucks, RV’s and more. You continue to drive your car and the lender places a lien on the vehicles registration as security.
- Longer Terms – Term is usually 12 to 36 months
- Lower Interest rates – 60% – 130%, Significantly lower than payday loans
- Higher loan amounts – Loan amount is based on the value of the car and the ability to repay
- Can help you repair your credit – Lenders report to the credit bureau, helping you improve your credit when you maintain a current loan
Payday Loans vs. Car Title Loans Summary
Another difference in the comparison of payday loans vs. car title loans is the interest rate on average is much lower when you get a car title loan.
When you are in a bind, a car title loan will provide you access to more money and you will pay less interest and fees upon repayment over the life of the loan. These loans also spread the repayment over a period of a couple years as opposed to one pay period. Payday loans must be paid immediately, which can be difficult if business is slow.
1(800)Car-Title® offers competitive interest rates for car title loans with flexible terms. You can get the money you need in a short period of time. Even if you have bad credit, you can get anywhere from $2,000 to $50,000 using the equity in your car.
Contact us today for a no obligation quote. Our car title loan application is quick and easy. Fill out the form on this page to get a free quote or call us at 1-800-227-8485 to speak to a loan officer today.