Life is spontaneous, and it’s impossible to plan for everything. That’s why it’s smart to have a backup plan when life throws you a curveball. Sometimes, the only thing standing between you and your goals is a lack of cash. Whether you’re looking to expand your business, finance your honeymoon, or simply need a little extra spending money over the holidays, an increasing number of Californians are considering personal loans vs. title loans. The accessibility of these loans makes them a convenient choice for anyone in an immediate cash bind.
How is a Title Loan different from a Personal Loan?
But while personal cash loans are helpful in their own respect, there may be an even better option. If you are the owner of a motor vehicle, you may want to consider taking out a title loan. These loans are backed by collateral (in this case, your vehicle), so they tend to be larger and set under more relaxed terms. They are also just as convenient as a personal loan: in most cases, you can have cash in hand within as little as 30 minutes. In many cases, people who choose to take out title loans are able to borrow more money with lower interest rates and fewer background checks. The choice between a personal loan and a title loan has the potential to save you thousands of dollars.
Unsecured Loan Drawbacks
A personal loan is considered an unsecured loan, since you’re not offering up any collateral for the money you’ll be borrowing. Because of this, lenders tend to loan out smaller amounts, which reduces their risk of you defaulting on their loan and running with the cash. To qualify for a personal loan, you’ll have to supply proof of income, such as a pay stub or bank statement, for approval. This shows the lender you have a plan in place to pay back their loan. You may also be required to verify your credit score or run a credit check. It’s possible to get a personal loan without having your credit checked, but this may lead to lower loan amounts and higher interest rates.
Accessing the value of your pink slip
In contrast, a title loan is what’s known as a collateral loan or secured loan, because you temporarily swap your car title for the money you are loaned. Obviously, you’ll need to own a motor vehicle in order to take out a title loan. However, it’s not always necessary to physically hand over your car — in fact, eligible borrowers only need to relinquish the title of their car. This means you can continue to drive your car, but it will be legally owned by the lender until you pay the money back. These loans are usually larger than personal loans, but the amount of your loan will ultimately be based on the value of your vehicle. A lender will typically factor in the physical condition of your vehicle, as well as its year, make, model, and mileage. Because of the collateral used, there are generally fewer credit checks involved, making title loans a primary option for people with low credit scores or anyone looking for a quick and easy way to borrow money.
It’s important to fully understand the terms associated with different types of loans. Keep up your expectations, but also be aware of your limitations. Remember that a loan is not a permanent fix, but merely a temporary one. In any case, title loans are one of the most popular options on the market, and for good reason.
Car Capital offers title loans at competitive rates, regardless of your credit score. If you’re interested in a title loan and live in Southern California, call Car Capital at 1-888-500-9887 and you could have cash in hand within 30 minutes. We are open weekdays from 8am to 5pm, and Saturdays from 9am to 1pm. We can get you the money you need today!