If you own a car outright, then you are lucky, your car can be financial leverage to secure a quick cash loan in emergencies. Both car title loans and pawn loans can help you get quick cash loans at the right time, but how do you know which of these two loan options is best for you?
Car Title Loans VS Pawn Shops
The two share some similarities but the differences are very obvious as well. To qualify for either a car title loan or title pawn, you need to have equity in your car and also have the car title in your name, Car Title Loans California will help you.
For a car title loan, you would not have to part with your car when you get quick cash loans by using your car as collateral. Your title is what remains with the lender until you have paid off the loan.
However, at a pawn shop, you can pawn other valuables to secure cash loans. You can pawn jewelry or other valuable assets. In this case, your will part with your valuable until you have completely paid off the loan. This is the major difference between pawning an item and taking out a car title loan.
Possession of the Car
When you visit a pawn shop to pawn your car title, it is most likely that you would have to leave your car at a secure lot until you have paid off the loan. This can affect your businesses and mobility around town especially if that’s the only car you own.
However, for a car title loan, you will still have your car. you would still have access to your car when you take out a car title loan.
How affordable a loan is can be determined by the interest rates and other charges that come with the loan. Pawn shop loans attract high-interest rates and this can make the cost of borrowing extremely high.
The duration of the loan can also affect its affordability of the loan. Pawn shop loans come with short terms which in the long run will increase your monthly payments. This can make pawn shop loans a little demanding considering the monthly payments.
However, car title loans can have a longer duration which allows the borrower to spread payments over a long period and this can reduce the monthly repayment amount.
Both pawn shop loans and car title loans require you to make your car available for inspection or provide details about the car for proper evaluation by your lender. With a pawn shop loan, you need to drive your car to the pawn shop for inspection while for some car title loan lenders, you only need to provide pictures, videos, and important information regarding your car to secure the title loan.
How Much Can I get with A Car Title Loan?
The amount of loan you can get depends on how much your car is worth and your ability to show your lender that you can repay the loan. You can as much as 50% of the equity of your car when you apply for a car title loan.
What Documents Do I Need to Get a Car Title Loan?
You need the following documents;
- A car title in your name.
- A government-issued photo ID such as a driver’s license or a U.S. passport.
- Proof of residence such as utility bills, insurance statements, a lease agreement, or credit card statements.
- Proof of income such as tax returns, paycheck stubs, bank statements, or government award letters among others.