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Car title vs payday: what is the best loan for the car owner

Owning a car is adding a lot to the convenience of your everyday life. When you buy your car with us, you also buy yourself some better opportunities. If you have bad credit, like almost half of Americans, there are not many options available to you. Let's see how having a car can make your life easier when getting a loan.

Payday loan

Being an American or a permanent resident of 18 and older, you might qualify for a payday loan. A payday loan is a type of unsecured (meaning, no collateral required) loan giving you easy access to cash when you need it. Lenders usually charge from $10 to $30 for every $100 borrowed, which translates to an almost 400% annual percentage rate (APR). You can borrow small sums to cover your emergency expenses and return them on your next payday. The direct lenders care more about you having a monthly income so you can return the loan, and not so much about your credit. Just fill in an online application with your contact information and wait to be offered loans from direct lenders. Even if you have bad credit, you can apply.

Car title loan

Car title loans are the type of secured loans. Meaning, if you have a car to your name, you can get a car title loan with your car as collateral. Apply, sign and keep driving your car. Your car title will be transferred to the name of the lender until you pay back the loan. This loan allows you to make more money than a payday loan because the loan amount depends on the price of your car. Also, the fees for car title loans are lower than the fees for payday loans making them a better option for the car-owners. An average monthly fee for a car title loan is 25%, which translates to an approximate 300% APR. Secured loans usually have better conditions than unsecured loans.

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