Title Loans Vs Personal Loans

If you are in need to borrow money and you want to avoid getting really expensive loans such as a payday loan, you may want to consider title loans or personal loans. We will discuss some of the details of these two options in today's article.

Title loans use your personal vehicle as collateral. If you have a clean title, meaning nobody else can lay claim to it, you can typically borrow an amount up to the value of your vehicle. If you are unable to make your payments and the loan goes into default, the lender has the right to take ownership of the car. So why should to get a loan over this type over an unsecured personal loan? Typically when a loan is back by a physical asset such as a motor vehicle it will have a lower interest rate, this is because in the event of non payment there is a better chance at recourse.

A personal loan, like one from a bank, can be a good option for some as well. You will need above average credit though, as there is no backing asset, and there may be slightly higher interest. On the other hand, in the event you are unable to pay you can likely get out of the loan without losing any personal property. Of course secure or unsecured not making payments has a negative affect on your credit score. There may also be a more lengthy approval time for unsecured loans such as personal loans when compared to title loans. View the original article here