Title Loans and Payday Loans: How Are They Different?
December 2, 2020 | Daniel Dewitt
With all the different types of existing loans out there for people to explore, it can be difficult to wrap your head around how each of them is different from each other. This is especially so in the case of title loans and payday loans. At first glance, they seem very similar, but there are some major differences. So what are those differences?
Title loans involve using your car title as collateral to secure a small loan. Payday loans, on the other hand, are small loans given to individuals who agree to pay it back once their next paycheck is received.
While this sounds simple enough, there are more details and information that go into explaining exactly how these two types of small loans are different from each other. Keep reading to find out the difference between title and payday loans, and a place to secure title loans in the Tennessee area.
Major Differences Between Title Loans And Payday Loans
How Are Title Loans And Payday Loans Different?
Title loans and payday loans are both loans for smaller amounts of cash – compared to other types of existing loans. They are popular due to their accessibility. In fact, a bad or no credit history will not be taken into account when considering an individual for a title or payday loan. They’re also relatively fast to secure; some people can get title or payday loans in as little as a day if the loan associate can approve them.
However, while title loans and payday loans seem similar, they have key differences that set them apart from each other.
Title loans require a form of collateral to get the loan, and in most cases, that asset is the title of your car. You sign the title of your car over to Tennessee Title Loans until you have the money to repay the amount you’ve borrowed. Many people prefer the title loan option to selling their car for emergency cash because they’re still able to use their car while they make back the money they need to pay. With a title loan, you can qualify between $300 - $2,500.
Payday loans, on the other hand, are small loans given to people seeking emergency funds. Agreements are typically made on the condition that the person receiving the loan will pay it back when they receive their next paycheck, hence the name “payday loans.” The average amount given in a payday loan is around $100 - $400.
How Can You Use Title Loans Or Payday Loans?
These types of loans are small loans, and the biggest reason people take out a title or payday loan is for help due to an unexpected circumstance – not due to poor financial planning. This could be due to many reasons, but most often is due to:
- Emergency travel
- Serious injury in the family
- Family emergency
- Unexpected unemployment
And related circumstances. Money gained through title or payday loans should be responsibly used to cover practical expenses like car repairs, medical bills, etc.
Benefits Of Coming To Tennessee Title Loans
Regardless of what loan you choose, there are plenty of benefits when choosing to work with us. We have Tennessee title loans locations throughout – so you are bound to find one close to you.
And each of our stores has knowledgeable loan associates that are willing to walk you through every step of the process. Even when you fill out our online form to begin, there is the option of doing a live chat with a rep to quickly answer any of your questions.
We also have a quick and easy process for either loan. We don’t make you jump through impossible hoops, only to find out that you don’t qualify. Our process is simple to understand and you will know the very same day you apply if you’ve been approved and for how much.
Process of Obtaining a Title or Payday Loan from Tennessee Title Loans
The process of obtaining a title or payday loan from Tennessee Title Loans is quick and easy. First, you’ll visit our website and fill out the short online request form with basic information about yourself. Make sure you mark specifically what loan you are pursuing. Soon after it has been submitted, you’ll get a call from a representative.
The representative will guide you through the process of obtaining a title or payday loan and answer any questions you may have. They’ll inform you of the documents you’ll need to have with you to secure the loan and confirm all information with you. For the title loan, make sure you bring in your ID, vehicle’s title, and the vehicle. For payday loans, make sure you have your ID, your most recent bank statement, your most recent pay stub, and a blank check from an active checking account in your name.
For title loans, you can visit their office with your paperwork and they’ll perform an inspection on your vehicle to determine the amount of cash that you qualify for. For payday loans, you’ll visit their office with the required paperwork where a representative will help organize a loan plan that works for both of you.
And that’s it! If you’ve relentlessly been searching “title loans near me” in the Tennessee area, look no further – Tennessee Title Loans is here to help.