Difference Between a Registration Loan and a Title Loan in AZ


Short of cash and need a quick loan in Arizona? Consider weighing title loans vs. registration loans as a way to get quick money. Either of these loans can solve your immediate financial needs in a hurry—especially in a financial emergency. Waiting on approval for a credit card or a traditional bank loan can take between a few days up to a week or more. The process is not designed to work for most emergency financial situations. There may also be a problem getting approval if you happen to have limited or no credit history, or are in the midst of rebuilding your credit score. Title loans and registration loans are a good choice to fill a financial gap in the event of an emergency.

The main difference between the two is that a title loan is secured by the borrower’s vehicle title and registration loans are secured by the borrower’s vehicle registration. It’s pretty straight forward, but an important distinction.

Car title loans, as the name implies, require a vehicle title in the name of the borrower. If you have a title you can borrow against the equity up to or equal to the value of your vehicle. As you are not applying for a traditional loan from a bank or submitting an application for a credit card, you will not need to provide any information on your credit history or pre-existing loans. The title acts as collateral during the loan with a temporary lien placed on the title by the lender, so car title loans do not require credit checks or income verification.

Car title loans are actually available on any vehicle you own, too. You can use your title on a motorcycle, pickup truck, RV as well as auto for collateral. If you’ve ever been in a situation where you need a quick sum of money for a short period, a title loan is a fast and convenient solution.

For a registration loan, the terms are a little different. The minimum requirement is having your car’s registration in your hand when you walk into the lender’s office. You must also have a valid Arizona drivers’ license, proof of residency and proof of income, and a Social Security card. The loans are a method of financing where the borrower can use their vehicle’s registration as collateral in exchange for a loan. Borrowers do not need the title to their car but have a car registered in their name. Even if you are still making payments on a car loan, you are still eligible for a registration loan.

Registration loans are unique to Arizona. They offer a convenient way to borrow money for consumers and, overall, lender requirements are few, which is a big plus when you need funds quickly. People who have poor credit limited or no credit, or live on a fixed income can benefit from the easy terms of a registration loan. Registration loans generally are for smaller amounts than car title loans, and since registration loans are not regulated, as long as the interest rate is in the lending documents, there is no cap for interest rates.  

Title loans and registration loans offer consumers a solution when they need a financial boost. Whether you use the title to borrow against the equity of your car or borrow against its registration, either way, you will be well on your way to receiving a fast, trouble-free loan.