What is the Difference Between a Payday Loan vs a Title Loan?

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A financial emergency can happen to anyone. Regardless of your bank account status, there is always the possibility of falling on hard times. It’s a good idea to understand where you stand and to know your options. There might come a time when an unbudgeted expense requires you to consider looking into a loan.

Major loan differences between a title loan and other types of funding like a signature loan, a payday loan, or a registration loan is that a title loan requires a vehicle title in exchange for funding while these other types of funding typically do not.

But that is certainly not the only loan differences between title loans and other loans. Did you know that one of certain types of funding could set you up for financial disaster? Before you jump into an important economic endeavor, such as taking out a loan, you should learn all you can about your loan differences. Thankfully, we have your resources right here!

A Closer Look at the Loan Differences: Title Loans vs Other Loans

Let’s talk about registration loans first. Registration loans are a type of funding, only available in the state of Arizona. Some people think registration loans are a good idea because the registration loan lender cannot repossess their car in the event that they default on their registration loan. While this is true, registration loans also come with some pretty hefty consequences.

It can be easy to be trapped by certain terms and conditions that virtually always come with registration loans. Most of the time, registration loans come with high interest rates and short payback terms. This can turn a small loan into a massive amount of debt that you are expected to pay back right away. If you don’t have thousands of dollars to drop in a moment’s notice, registration loans are probably not for you.

Title loans are much different. Title loans are offered throughout multiple states in the U.S., but not in every state. Title loans can also go by various different names. Here are some other phrases that can be used to talk about title loans:

  • Auto title loan
  • Car title loan
  • Pink slip loan
  • Automobile title loans
  • Car equity loan
  • Cash for car title loans
  • Auto equity loan
  • Auto collateral loan
  • Title loans with bad credit

What are the Benefits of Different Types of Title Loans?

While there are many types of title loans, they all have similar benefits. Title loans have been a convenient option for fast emergency funding for people throughout the United States, so there is a chance they may be right for you to.

Check out just a few of the benefits that keep people coming to title loans for short-term essential funding:

  • Fast Approval – When you’re in the middle of a financial crisis, waiting is something you just don’t have time for. Title loans have a notoriously quick process. Upon approval, it is possible to receive your title loan funding as soon as the same day, or the very next business day.
  • Convenient Terms – Car title loans are also known for their convenient payback terms. While title loans are meant to be a form of short-term emergency funding, it is usually possible to extend payback terms up to 3 years if that is what works best for your financial situation.
  • Competitive Rates – The car title loan industry is competitive. Max Cash Title Loans uses that kind of environment to our advantage so you can get the best deal on a title loan.1 3 4 Some loans even have flexible rates, but this varies from lender to lender.
  • Flexible Process – Since car title loans are meant to help people out during times of financial stress, it is only natural that the process be as easy-going as possible. From the very start, there is no obligation to proceed, and if you’d like to re-visit terms or rates during the life of the loan there is always the option to discuss that with your lender.

To learn even more about the different types of title loans and how they could benefit you, Max Cash Title Loans has informational pages that may be helpful to you.

Importance of Interest Rates

When looking at how much will be paid back on a title loan it is important to look at the interest rate being charged. This includes both MPR – Monthly Principal Rate and the APR – Annual Percentage Rate. For car title loans the interest rate can be extremely high so it is a good idea to be informed about the exact amount being paid before committing to a contract. One reason that interest on title loans is so high is because lenders do not take into account credit history.

Will Bad Credit or Bad Credit History Impact Eligibility?

In the traditional loan process, bad credit can negatively impact a person’s ability to get a loan. These types of loans fall under the category of an unsecured loan – This is a type of loan where the lender does not have any type of security if the borrower cannot pay back their debt. Common types of unsecured loans are credit cards or payday loans. The convenient thing about car title loans is that if a person has bad credit it may not impact their eligibility.  This is because a car title loan is a secured loan – this is a loan where the lender has some type of security in case the borrower is not able to pay the lender back. Another common example of a secured loan is a mortgage. Taking out a car title loan may even help a person build credit.

Max Cash Title Loans

Max Cash Title Loans is a free service that connects people with lenders all across the United States. We make it quick and easy for people to find a lender that may work with them. All of our lenders are trusted sources, and we can filter through them to see which ones will fit a borrower’s specific situation. To get started get into contact with us:

For more information on the title loan process check out our information page. Here we have answers to commonly asked questions regarding car title loans.

Title loans can have several different names, however they all mean the same thing. A title loan involves having a qualifying title for a vehicle and then using it as collateral for a loan. A title loan may be a good option for people who have bad credit or bad credit history. Lenders ask for some basic information from the possible borrower, this includes ID, proof of income and proof of condition of a vehicle. Before signing up for a title loan it is important to review exactly what it will cost. After doing all this, finding a lender who will work with different financial situations is important. Using Max Cash Title Loans can drastically narrow down the search for a lender and a great deal on a car title loan5.

The Process of Getting a Title/Car Title/Auto Title Loan

The first step in getting a car title loan is making sure to have a vehicle that is in safe, working condition. If a person has more than one vehicle, it is a good idea to let the lender know about all of them.  Keep in mind that generally a person can only take out one title loan at a time and cannot combine the value of their vehicles. Once the details are figured out for the vehicle(s), the lender will ask for a few things. Generally, in order to get a title loan this information is needed:

  • Government Issued I.D (Driver’s License, Passport etc.)
  • Proof of Residency (bills, a copy of a lease or mortgage, etc.)
  • Proof of Income (Paystubs, Invoices, Bank Statements etc.)
  • Pictures of The Vehicle(s) (the lender will give specifics)

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Once these pieces of information are gathered, the lender will figure out eligibility in a few ways; they will carefully evaluate a vehicle’s value, monthly income will be looked at, along with the borrower’s ability to pay back the loan.