For people who have bad credit records, there are only two options they can resort to when it comes to fast cash needs and these are payday loans and car title loans. Payday loans and car title loans have a lot of similarities. In fact, Halton Hills car title loans are a form of payday loans. Let me brief you to each of these financial instruments.
What Are Payday Loans?
Payday loans are the form of financial instrument which lenders offer to subprime borrowers, those who have obtained a poor credit record due to default in paying their past debt obligations. These loans are great for subprime borrowers because credit histories are not taken into consideration when borrowing cash. As long as you have a good employment record and you have an upcoming pay check, it is easy for you to secure a payday loan.
Payday loans are short-term loans. The reason why payday lenders offer very short-term loans is because it lessens the risk attached to subprime borrowers. Usually terms ranges from weeks to months. These loans are due for payment when the borrower receives his or her monthly pay check. Apart from being a short-term loan, a payday loan also comes with higher interest rates because it caters risky borrowers and also because it is unsecured.
What Are Car Title Loans And Why Are They The Better Option?
Halton Hills car title loans are a form of secured payday loans. They are tailor-made to those with poor credit records. Unlike payday loans with extremely high interest rates, car title loans have lesser interest rates because these loans are secured to the car title that the borrower is required to submit. This is also the reason why these loans are called pink slip loans as “Pink Slip” refers to the car title.
Now let us talk about the reasons why car title loans are better options to payday loans:
- Unlike traditional payday loans, borrowers of car title loans need to submit their pink slips or their car title to the lenders before being approved of a cash loan. This means that the loan is secured. It being a secured form of loan, the risk of dealing with subprime borrowers becomes lesser hence the interest rates attached to Halton Hills car title loans also become lesser compared to unsecured payday loans.
- Halton Hills car title loans are approved even on short notice. Unlike other financial solutions which require a lot of documents from borrowers, car title loans don’t. You can expect to have your cash loans within of one day without going through so many hassles.