Title Loan vs. Payday Loan

loan application formWhen you’re in need of money upfront, a loan is one way to pay a large sum all at once, whether you need cash for an unexpected emergency in Michigan or to cover expenses in Wisconsin. However, it can be challenging to get approved for a loan if your credit isn’t stellar or you have a limited credit history. Title loans and payday loans are both options, regardless of your credit. We’re comparing a title loan vs. payday loan, so you can see what each requires and how they differ.

Title Loans

With this type of loan, you use your car title as collateral to borrow money. Title loans typically don’t require a credit check since they hold your car title until the loan is paid back. These short-term loans are typically for when you need a small amount of money in Idaho and can be approved quickly. You can work with your lender, like Xpress Cash, to settle on a payment schedule so you can pay back your loan.

Payday Loans

Payday loans are another option for a short-term loan. These loans are usually small amounts of between $50 to $1,000, depending on your state and your need – in Michigan, you’re legally allowed to have two payday loans at once for up to $600 each. Like with a title loan, you don’t need stellar credit. You don’t put up collateral, but you do need to have an income, as payday loans are paid back within a short amount of time — usually by your next payday. You can look at these loans as something like an advance on your paycheck, and they’re meant to help when you need to make a payment between pay periods. If you don’t make your repayment on time, however, you might find that a payday loan is difficult to get out of.

Title Loan vs. Payday Loan: Which Do You Need?

As you can see, both title loans and payday loans offer an option for a quick influx of cash when needed. A payday loan is a good option for a smaller amount of money, such as a high utility bill. A title loan is a good option if you need more time to repay the loan, especially if you need a bit more money upfront. If you’re still not sure which loan option is the best for you, contact us.