Understanding Auto Title Loans vs. Non Traditional Loans
An auto title loan can be a fast and convenient way to get yourself essential funding. If you are currently going through a financial crisis, an auto title loan could be a simple way for you to solve your personal budget issues.5 If other types of funding are on your radar, you might be wondering how to compare auto title loans vs. non traditional loans.
Other alternative loans typically include registration loans or payday loans, which both come with advantages and disadvantages, just like title loans. Before you sign on the dotted line, it’s important to make an informed decision and choose the right loan option for your preferences!
What are Auto Title Loans?
Auto title loans are known by a few different names, including car equity title loans and car title loans. Regardless of the name, to secure funding through this type of loan, you will need to pledge your qualifying car’s title as collateral for emergency funding.5
Depending on the value of your vehicle and your income, you can potentially receive up to half of your car’s equity through a title loan!1
Advantages of Auto Title Loans
Since car title loans are secured loans, they come with certain advantages, including the following:5
- Keep Driving Your Car: While you are required to use your car’s title as collateral for funding, you don’t need to give up driving your car as soon as the money is in your pocket. As long as you keep up with your payments, access to your vehicle is possible during the repayment process!
- Flexible Application Process- Even with Bad Credit: If you have bad credit, qualifying for traditional loans will be difficult. This is due to the fact that most lenders see you as a higher credit risk.
- Competitive Interest Rates: Max Cash Title Loans strives to work with lenders who can offer competitive rates and convenient terms for auto title loan borrowers!4
- Freedom with Your Funds: Use your loan proceeds to handle various types of personal expenses, including medical bills, home repairs, and other unexpected expenses.5
Disadvantages of a Title Loan
Like many other loan options, title loans are not without disadvantages. Since you are required to use your car as collateral to guarantee the loan, there is a potential risk to consider. If you are unable to keep up with your payments, you may enter loan default. In layman’s terms, loan default is when you fail to honor the terms of your loan agreement. Therefore, as your lienholder, the lender has the legal right to seize your vehicle and sell it to cover your debt.
To try to avoid this, make sure to reach out to your lender if you are struggling when paying back your loan. Most lenders and loan services will prefer to work with you to find other solutions to repossession. This may include refinancing or a loan modification!5
What are the Alternatives to Title Loans?
As mentioned above, there are alternative options to title loans, both secured and unsecured.
- Secured: Registration loans is a specific type of secured loan that allows you to use your vehicle’s registration as collateral for funding. Unfortunately, registration loans are only available to qualifying Arizona residents.5
- Unsecured: Payday loans, as the name suggests, are meant to help borrowers bridge the gap between their paychecks by providing fast financial support. While they do provide fast cash, they can often come at a price. This disadvantage is the fact that you will likely pay a high price for the origination of your loan. Some lenders will charge $10-$15 per $100 that you borrow, which matches an APR of over 400%! It can be difficult to pay back and manage this type of unsecured loan because of the short payback terms. Typically, the entire amount is due the next time you get paid! That may not be feasible for some borrowers.
Choosing Between Auto Title Loans vs. Non Traditional Loans
If you’re stuck between auto title loans vs. non traditional loans, comparing all of your options is essential. Registration loans are another type of secured loan like a title loan, but they have limited reach. Unless you are a resident of Arizona, you will not be able to apply for this type of loan opinion.
Additionally, while payday loans can provide you with fast cash, they are known for hidden fees, short loan terms, and smaller loan amounts of around $500 on average.
In comparison, title loans can provide qualified borrowers with larger loan amounts. This of course depends on their state of residence, along with the value of their vehicle and their ability to repay the loan. The more your vehicle is worth, the more fast funding you can borrow through a title loan as long as you can prove that you have the means to pay back the loan.1 5
Ultimately, the choice you decide to make depends on your preferences as a consumer. Title loans can provide you with many advantages, but applying for a loan is a significant decision. It is important to thoroughly understand both the benefits and drawbacks of each loan option! That way, you can work towards making an informed decision as a consumer.
Apply for Title Loans With Max Cash Title Loans Today
If an auto title loan sounds like the right fit for you, then your next step forward is to start your title loan journey! With Max Cash Title Loans, you can expect a hassle-free inquiry process designed with efficiency in mind.2 5
Here’s a closer look:
- Get Started Online or Over the Phone
- Submit Your Paperwork and Get Matched with a Lender Upon Initial Approval
- Choose How to Receive Your Money!5
Upon full approval, you can access your funds in as little as one business day! So why wait to explore auto title loans? Submit an inquiry online or call 855-561-5626 today! Our loan agents are available for extended hours to take your call.2 5