What do auto title loans, car title loans, pink slip loans, title loans, and payday loans all have in common? All of the loans listed, with the exception of payday loans, are all the same thing. Auto title loans come in many different name variations, but they all serve the same purpose, which is borrowing money using the borrower’s car as a security deposit for the lender. In any of these cases, a copy of the borrower’s vehicle title is temporarily given to the lender as collateral. So what about payday loans? A payday loan is an unsecured, short-term loan where the borrower must present to the lender their previous payroll or employment records in order to utilize the loan.
Now that you have an idea of what auto title loans and payday loans are, the expert title loan lenders at Tio Rico Te Ayuda want to share why taking out auto title loans have a much greater advantage than taking out any other type of loan.
Quick Access to Cash, No Credit Loans
Typically, it takes up to a week to process auto title loans. During this process, the borrower agrees to put the car title on their vehicle up as collateral. If the borrower fails to make payments or repay the full amount of the loan over time, their vehicle will be repossessed by the lender. The advantage of this loan is that borrower is able to get their hands on some money very quickly. At Tio Rico, anyone with a working vehicle is eligible for title loans with no credit or background check involved.
Payday Loan Disadvantages
Although payday loans come with some benefits, the costs tend to outweigh them. Here are just a few ways payday loans differ from auto title loans.
- Payday loans tend to be more expensive
- They have the possibility of creating repayment problems due to cost
- The process of taking out a payday loan takes a lot more time
- Payday loans also come with (on average) high annual average principal rates (general loan interest rates which max at around 25%)
- Due to payday loan challenges, borrowers tend to end up decreasing their credit scores.
If applying for an auto title loan interests you, head over to the a Tio Rico Te Ayuda location nearest you to speak with one of our lending experts today!
Image Credit: Tax Credits