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What is the Difference Between an Auto Title Loan and a Payday Loan?

March 29, 2019

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There are many reasons people find themselves needing a loan fast. Loss of a job or other losses in income, a medical emergency, unexpected expenses, and other unexpected financial situations can occur at any time. On the other side of the coin, maybe someone needs a vacation and would like to have the extra money without creating a financial hardship or taking money away that is earmarked for bills, rent, etc. In any case, relying on a savings account would be nice, but many Americans simply don't have adequate money in a savings account to handle these situations, so taking out a loan is the only option. Unfortunately, trying to get a loan from a traditional lender can be time consuming and in many cases difficult, depending upon your credit. That's when another loan option becomes necessary and even more convenient.

Difference Between Auto Title Loans and Payday Loans

What Are the Loan Alternatives?

You certainly don't, or can't, go to a traditional lender and a loan shark is really out of the question, so what alternatives do you have for a fast, easy loan? Many people think about payday loans when they think about getting a loan fast. Auto title loans are another loan option that comes up. A lot of people assume that payday loans and auto title loans are the same, but this is far from the truth. There are some big, and important, differences between a payday loan and an Auto Title Loan. You need to know about these differences if you are considering getting a fast loan.

Let's start with payday loans. Most payday loans will lend you money with a term the length of your pay period, but typically the loan will need to be repaid or taken out again every one or two weeks, depending on your pay period. A few, but not many, payday loan companies might work with the customer if they get paid monthly, but in most cases the payment for the loan will be required within one or two weeks unless the loan is paid off in full and taken out again. Another thing to remember about payday loans is that the interest rates for such a loan is typically extremely high, making these loans difficult to pay back. Most payday loan companies have very little flexibility. While you won't need to worry about a credit check, you will have to provide a great deal of paperwork and you won't find terms that fit your needs. They are definitely an option for fast cash, but they certainly aren't your best option.

Interest Rates for Auto Title Loans
An auto title loan is completely different than a payday loan. What is the difference between an auto title loan and a payday loan? Well, there are several major differences between a payday loan and an auto title loan. First, with an auto title loan, you are using the equity in your vehicle to secure a loan. The loan amount is based on the value of your car. In most cases, you won't need to leave your car to secure the loan, just the title. One of the biggest advantages an auto title loan has over a payday loan is that the interest rates for an auto title loan are normally lower than those of a payday loan. Another huge point to know about auto title loans is that the loan terms for the loans are longer than payday loans terms, meaning you have longer before you need to worry about paying the loan off. This can be a huge advantage when you're borrowing money because you have a sudden financial crisis. In a financial emergency, chances are you won't be able to turn right around and pay off your payday loan, but with an auto title loan you have more time before you have to worry about paying the loan off. You simply make payments on the loan over the term of the loan, allowing you to pay it off more conveniently.

TitleSmart is the Smartest Choice for Auto Title Loans

The biggest thing that sets TitleSmart apart from payday loan companies and other title loans companies is our genuine concern for our customers and their financial situations. We truly want to make sure we get our customers the auto title loan that fits their needs when they find themselves in a situation where they need a loan fast. At TitleSmart, we work with our customers to make the process of getting an auto title loan painless and free of stress. We understand that a financial crisis can be stressful, so we go out of our way to ensure we don't add to that stress.

Auto Title Loans
At TitleSmart, the process for getting your auto title loan couldn't be easier. First, there's no credit check, so we can get you the loan you need fast, with no need to check your credit. Good, bad, or no credit, it doesn't matter. If you have a vehicle title that is in your name and free and clear, we will assess your vehicle and tell you the amount of the loan you qualify for the same day you apply. There's no waiting around like you do at traditional lenders. There are no tricks and we don't even make you fill out stacks of paperwork. We ask for a few simple documents, such as proof of your ability to pay the loan back (it doesn't need to be a job), proof of residence (utility bill), the title to your vehicle, and a valid I.D. We won't ask why you need the loan. The best part is that you don't even have to leave your vehicle with us to get the loan. You can drive away in your car and continue doing what you need to do every day. When you're ready for an auto title loan, call TitleSmart at (954) 404-7306 or fill out the form here on our website to get the process started today.

If you found this article helpful then let us know in the comments section below. Likewise, feel free to share it using the share options below. Want us to cover another topic of your interest pertaining to auto title loans? If so, then like us and follow us on social media, and post to any of our social media profiles the topic you'd like us to discuss: Facebook TitleSmartFL, Twitter @TitleSmartFL, and Instagram @TitleSmart.

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TitleSmart INC makes use of the phrase "Auto Title Loans" for the sole purpose of advertising. We provide auto equity loans. TitleSmart INC is licensed under the "Florida Consumer Finance Act" under Florida Statute 516. For this reason, lender's loans are exempt from licensing requirements under the "Florida Title Loan Act." This lender's approval of loan is based on the consumer's ability to repay the loan and the condition of the vehicle being used to acquire the loan.

Fees: $89.00 Lien Fee, $25.00 Application Fee, and a Document Stamp Tax which changes according to the amount of the loan. The fees are built into the life of the loan. APR: Annual interest rate ranges from 18% to 30%, depending upon current market.

Repayment: Our convenient payment options are designed to fit the consumer's ability to repay a loan. Those options currently range from 6 months to 24 months.

The table below represents an example of the overall cost of a loan. If you have questions or need further information, we are always happy to be of assistance. We want you to fully understand the terms and cost of your loan before you get one.

Loan Amount$1,000$6,000
Interest Rate(APR) 30% - $214.7318% -$733.25
Lien Holder
(One Time Fee)
$89$89
Application
(One Time Fee)
$25.00$25.00
Doc Stamps
(One Time Fee)
3.8321.33
Term 12 months 14 months
Monthly Payment$109.40$489.24
Total of Payments$1,312.81$6,849.33
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