What’s the difference between online payday loans and online car title loans?

Payday loans are offered if there is proof of a steady salary. The idea of a payday loan is that you have to repay the loan the next time you get your paycheck. Payday loan suppliers usually have access to your checking account or you have to give them a post-dated check which will be cashed the next time you get paid. With these loans, how much you make will determine if you get the loan or not.

Online car title loans are not quite the same. Your credit score isn’t very important. Similar to a payday loan and in most cases it is not even considered at all when you go for a vehicle title loan. The most important qualifying requirement is the value of your vehicle, not your income.

You can use almost any vehicle. However, you have to give the loan company the title of your vehicle in order to get the loan. The car is, therefore, collateral on the loan and guarantees the lender will get repaid should you default on repaying your loan. If you don’t make the required repayments, the loan company could repossess your vehicle and sell it to recover the money they lent. This is why earnings are not important for online car title loans. Nevertheless you might still have to show you are earning money and that you have the capacity to make the monthly payments.

Your personal financial circumstances will determine if a payday loan or car title loan is the better option for you. A payday loan is obviously a better option if you don’t own a vehicle. But if you own your car, online car title loans will allow you to borrow more money for a longer time with much lower interest rates compared to a payday advance loan. Furthermore, since you still own your vehicle while you pay back the loan, there isn’t much to lose by taking out a car title loan, just be sure that you can repay the loan on the agreed terms.

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