Title loans are one of the many types of quick cash advances that are available to consumers today. It can be difficult deciding which loan to request because of the amount of options. You should choose a title loan over another loan, such as a payday loan if you need a large sum of money within 24 hours. Lenders base title loans on the value of the vehicle. Therefore, someone owning a new vehicle has an excellent chance of getting a large loan in the vicinity of $5,000 or more. The following are additional times when you might want to choose a title loan.
Choose Title Loans for Fair Loan Life
Products such as payday advances are for short-term use only. The life of such an advance is not much longer than 14 days. Consumers who would like more time to repay the advance will have to make special arrangements with the payday loan company. A title lender will give a borrower at least 30 days on the initial loan. While 30 days is not very long, it is still much longer than the life of a payday advance.
Title Loans are Excellent for Serious Plans
Consumers should use neither a payday loan nor a title loan for frivolous purposes. Both products are most beneficial when the proceeds go to emergencies, investments, or savings plans. You should take the time to calculate your disposable income before requesting either loan type. Disposable income is the remainder of your money after deducting expenses from income. The figure that is left will inform you of whether you can afford to take an advance. It should be equal to or greater than the amount of the title loan plus interests and fees.
Things to Consider Before Getting a Title Loan
You should consider several things before taking out a title loan. One thing to think about is vehicle ownership. Title lenders will place a lien on the borrower’s vehicle until he or she repays the advance. The lien gives the lender the right to confiscate the automobile if the borrower does not repay the advance. Some borrowers do not like the idea of putting their vehicles up for possible repossession. Therefore, it needs to be fully thought through. The vehicle is the collateral that closes a title loan. If you don’t want to take the risk with your vehicle, you might have an easier time with a payday loan.
Another thing you will want to consider is whether the expense is an emergency. You should stop and think about any future paychecks that may be coming. Perhaps you can wait longer and save for the item that you’re trying to obtain. If an emergency is prevalent, then a title loan can be a wise idea.