man in his car holding blue piggy bank from getting car title loan

Title Loans and Payday Loans: How Are They Different?

When unexpected expenses arise, many people turn to quick financing options such as title loans and payday loans. Although these loans may seem similar, key differences can impact which one suits your financial needs better.

Here’s a breakdown of title loans vs. payday loans to help you choose wisely and secure funds fast. 

What Are Title Loans and Payday Loans?

  • Title loans let you borrow against your car title, using it as collateral. You can still drive your car while repaying the loan. You may qualify for $300–$2,500, depending on the value of your vehicle.

  • Payday loans are small, short-term loans, typically $100–$400, that you agree to repay on your next payday

While this sounds simple enough, there are more details and information that go into explaining exactly how these two types of small loans differ from one another. Keep reading to find out the difference between title and payday loans, and a place to secure these loans in the Tennessee area.

Major Differences Between Title Loans And Payday Loans

Keep reading for more information on these loan options.

Title Loans And Payday Loans: What's the Difference?

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

If you are wondering how title loans work, they require a form of collateral to qualify for the loan, and in this case, that asset is the title to your vehicle. To use your title, it must be lien-free, meaning it's clear of any judgments or claims against it, and in your name to secure a loan through the lenders at Tennessee Title Loans, Inc. If approved, you will sign over the title to our lenders to receive the loan amount you are eligible for. Once that loan amount has been repaid in full, the vehicle title will be transferred back to you.

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 scheduled payments. With a title loan, you can qualify for $300 - $2,500, but the exact amount will be determined by the value of your vehicle and the amount you can afford to repay.

Here's what you'll need to get started:

  • Requires a car title as collateral.
  • The loan amount is based on the vehicle's value.
  • Longer repayment periods and often higher loan limits.

Payday Loans

Payday loans, on the other hand, are small loans given to people seeking emergency funds. Agreements are typically made on the condition that the payday loan repayment terms for the person receiving the loan are that they will pay it back with their next paycheck, hence the name “payday loans.” The average amount given in a payday loan, also known as a cash advance loan, is from $100 - $400 with us at Tennessee Title Loans, Inc.

Here's what you'll need to get started:

  • Requires proof of income and an active checking account.
  • The loan amount is typically limited to a few hundred dollars.
  • It must be repaid by the next paycheck with high interest.

How Can You Use These Loans?

These types of fast cash loans are small loans, and the biggest reason people take out a title or payday loan is to 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 emergency expenses like car or home repairs, medical bills, unpaid utilities, etc. Keep in mind, these loan options may have higher interest rates than other, more traditional loan options.

man and woman holding cash in their hands happy from recent title loan and payday loan

Why Choose Tennessee Title Loans, Inc.

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 who 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. 

  • Convenient locations across Tennessee, just search “Tennessee title loans near me.”
  • Friendly support and fast responses, even via live chat on our website.
  • Quick, easy approval process with clear answers about eligibility, the same day.

How to Apply for Tennessee Title Loans or Payday Loans

  1. Start online by completing our quick request form on Tennessee Title Loans, Inc.
  2. A representative contacts you to guide you.
  3. Gather required documents:
    • Title loan requirements: Driver’s license or state-issued ID, lien-free car title, and your vehicle for inspection to determine its value
    • Payday loan requirements: Driver’s license or state-issued ID, most recent pay stub, bank statement in your name, and a blank check from that checking account
  4. Visit the office or set up a meeting.
  5. Get approved and receive cash, often on the same day.

FAQs

Who qualifies for Tennessee title loans or payday loans?

We welcome all credit types at Tennessee Title Loans, Inc. You’ll need to be 18+, have a state-issued ID, an active checking account, proof of income (like a pay stub), and the title or a blank check, depending on the loan. This opens options to those with limited or bad credit.

Can I still drive my car with a title loan?

Yes! You keep full use of your vehicle during the repayment period if you keep to the scheduled payments. We only hold the title as collateral, not the car itself.

Can payday loans be renewed?

Payday loans are due on your next payday. Rolling these personal loans over may mean extra fees, so use them strategically and only when needed.

How quickly can I get the title loan or payday loan cash?

Most customers get funds the same day, usually within a few hours, after approval. If not, the following business day.

Get The Loan That's Right For You Today!

Whether you choose a Tennessee title loan or a payday loan, both funding options offer fast financial help when unexpected expenses come up. Title loans are ideal if you own a vehicle and need a larger amount of cash with more flexibility. Payday loans are better suited for smaller, short-term needs until your next paycheck.

No matter which loan you choose, Tennessee Title Loans, Inc. is here to guide you through a fast and simple process, so you can get the help you need, quickly and confidently.

Apply now! Our loan representatives are waiting to get your application started! 

Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.

Daniel Dewitt

Daniel Dewitt is a lifetime blogger with a finely-honed ability to break down, analyze, and interpret economic trends for the layman. He's fiercely invested in spreading financial literacy and helping everyday people gain the tools they need for their own economic success.