When your savings or checking account balance is not enough to cover a financial emergency at that point having access to fast, affordable cash from a reputable and trustworthy lender can be a rescuer. Short-term lending is often the only viable option if you’ve had a few credit slips in the past, as banks and credit card issuers may judge you as too high a risk to take on a new personal loan or credit card. When money woes strike, most people then turn to a title loan or payday loan to make ends meet. However, it’s important to understand how title loans vs. payday loans and their working criteria for choosing one solution over the other.
A Car Title Loan is a loan in which the borrower’s car title is used as collateral. The borrower must own the car outright. The vehicle must be lien-free.
A Payday loan allows a relatively small amount of money lending as compared to title loans and at a high rate of interest on the agreement that will be repaid when the borrower receives their next wages.
Title Loan Basics
Title lenders offer you the short-term loans while holding your vehicle’s title as collateral. Usually, the lender evaluates the vehicle’s value and offers to lend up to a certain percentage of that value.
Snap Car Cash provides the title loan in various provinces of Canada with a loan term up to 5 years. You can obtain up to $50,000 easily from Snap Car Cash with 70% lower interest rates vs. our competitors in Canada. No prepayment penalties involved like other title lenders. You can submit the form online, free of cost.
Payday loan basics
Payday lenders also offer short-term cash loans but in exchange for a post-dated check, usually dated for your next payday. The amount of the check includes the loan total plus the finance charge. The only silver lining of a payday loan is that it is an unsecured debt, which means the lender has no collateral to seize if you are unable to pay the loan back.
How can we compare payday with a title loan?
With payday loans, the lender put up money based on the amount of your next paycheck. In most cases, people set up an automated transfer for the amount of your paycheck and provide it to the lender. They offer immediate funding, and once your paycheck is programmed as a success, they deposit the check or initiate the transfer as repayment of the loan. Payday loans are typically for short periods (say, two weeks), and the amount obtained comparatively range from $100 to $1,000. The cost of a payday loan is often a regular fee based on the total amount borrowed, and as you might know, payday loans require income check for approval.
One clear difference between title loans and payday loans is that title loans are not secured by a paycheck, but instead use a vehicle as collateral for the loan. Depending on the amount of equity you have in your vehicle, title loans are typically available for the amount ranging between $1,000 and $50,000 making it easier to get additional cash when you need it. Another big difference between title loans and payday loans is the repayment term; most lenders allow you to repay over 12 months or more for the title loan, which helps you budget other than payday loans whereas payday loan is mostly for a week or two or a month.
As a result, title loans are less expensive than payday loans because they signify a lower risk to the lender but for that, you must have equity in your vehicle to be eligible for a title loan.
Snap Car Cash offers the best title loans service in Canada. We will also beat any competitors approved loan offer and provide you an additional $200 cash bonus for signing up a loan with us.
Call 1-888-866-7627 (toll-free) to qualify for a title loan with us!
All loans subject to our approval.
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