Type of Loans – What Are the Differences?

• We all need extra money from time to time (or all the time), the key is managing it well…

Encountering financial hardship can happen to anyone. Perhaps your rent has increased, or you need help paying an unexpected medical bill. Finding extra money when you need help can be challenging, especially for people who can’t qualify for traditional loans.

Fortunately, many options are available to people who need to access cash quickly. Depending on your circumstances, you can qualify for a variety of different loans. However, you may receive less money than you want, so it’s essential to understand the differences between options.

Title loans can offer money to people who need it fast by using your vehicle as collateral for funding. Depending on your needs and financial situation, cash advances, payday loans, and traditional bank loans are also available.

So, when it comes to the type of loans-what are the differences between them? Below are the differences between the various loans available to people who need cash quickly! Understanding the different types of loans can lead you to apply for the right one for your financial situation.

Types of Loans – What Are Title Loans?

Title loans are short-term options secured by the borrower’s vehicle title. Qualified borrowers agree to put up their vehicle title as collateral in exchange for funding. Lenders care less about how much credit you have and more about the equity in your vehicle and if you have consistent income for repayment. Lenders can repossess the car if you fail to pay the loan back.

The good news is that car repossession is typically the last resort any lender wants to take during a title loan option. Instead, they encourage borrowers to reach out and explain their situations instead of not paying bills. Lenders can work out different loan terms or help refinance the funding.

Providing proof of consistent income during a title loan application is crucial because it shows lenders that you can repay the money. You can be traditionally unemployed when applying for a title loan as long as you have a steady income. Examples of income proof you can use are workers’ compensation, Social Security benefits, or self-employment. You can also use pay stubs from a job if you work regularly.

Different Kinds of Loans-What Is a Cash Advance?

A cash advance is a short-term loan typically taken out against a borrower’s credit card account. When a borrower needs access to a small amount of money quickly between paydays, it serves as a bridge.

Generally, cash advances can come with high-interest rates, and you must pay them back when your next credit card bill arrives. This loan can be a good option if you need a small amount of cash quickly, but you can only take out a few hundred dollars. If you need more money, title or traditional loans can be a much better option.

Different Type of Loans-What Is a Payday Loan?

A payday loan is a high-cost, short-term loan taken out against the borrower’s next paycheck. The loan typically must be paid back in full on the borrower’s next payday, so you don’t have multiple months to pay them back. They can also come with high-interest rates and fees, making them more difficult for a borrower.

This option is excellent if you need a bit of cash before your next paycheck, but similar to a cash advance, you may not receive a substantial amount of money. As mentioned earlier, title loans can provide you with high loan amounts, depending on your car’s equity.

Apply for an Online Title Loan Today

Title loans can be great options if you need money quickly but also suffer from poor credit. While a cash advance or a payday loan can provide quick cash, you may not receive a substantial amount. Additionally, both options can come with high-interest rates or fees.

Qualified borrowers can obtain approval for a title loan within one business day of applying, which makes them helpful for people who need money fast. Additionally, they can be convenient because you can apply online from the comfort of your home. There is no need to visit a physical location. If you are not traditionally employed, there are several ways you can prove your income!

Now that you know more about the different types of loans and their differences, it can be easy to choose the most suitable one. If a car title loan is the right fit for you, you can easily apply online or over the phone today!