Many loan products are available if you ever get into a situation where you need fast cash. The two main kinds of quick short-term loans are title loans and installment loans. The following is a comparison of the different types of loans so you know which one to choose the next time you have an emergency.
Short-term installment loans are convenient options in that they do not require collateral or any other type of security. Also known as quick cash loans or payroll advances, these options require a checking account and the borrower to have a source of income. Funds can be available as soon as the next business day. This makes them very popular for people in a financial pinch who lack alternative forms of borrowing. Whether it’s making ends meet between paychecks or paying the mechanic to replace the clutch, installment loans are viable options in many situations.
Title loans have a self-explanatory name. These are loans that lenders issue with the borrower’s automobile title as the basis of their security. Title lenders use several factors to determine the amount of cash they provide to borrowers. They use the value of the car as the base, and then they adjust it according to the condition and mileage on the vehicle. They offer borrowers a certain percentage of the value that they can use for their loans. Borrowers can accept or refuse the loan offer.
Quick cash loans and title loans have similar qualifications. Both loan types require the borrower to be at least 18 years of age because of the contract signature requirement. Title loan borrowers need to have their title in their possession, and they need to be the only owners of the vehicles. Furthermore, they must bring the vehicle in for an inspection to receive the funds. Most cash advance lenders and other quick cash lenders usually require the applicants to have a bank account that has not been overdrawn or had any strikes against it. Their requirements for account longevity differ. Applicants also have to meet the minimum income requirements to qualify for the loans. A $1,500 monthly income is generally what lenders desire.
Loan amounts vary between lenders and loan types. Title loan borrowers can potentially receive more money than other quick cash lenders provide because of the car’s value. It’s quite possible for someone to receive a title loan of $5,000 or more if the person owns a new car. Quick cash loans usually fall in between $100 and $2,500. Both loan types have interest charges attached to them. Applicants should read the terms closely to ensure that they understand the payback amounts.
Quick Cash Loans vs. Title Loans
Both types of loans can provide someone with the funds they need in an emergency. Both loan types have quick application processes and short-term loan lives. One is not better than the other necessarily. The choice depends on the borrower’s circumstances. Title loans are for automobile owners. Quick cash loans are options for people who do not own cars or people who have a lower loan requirement.