If you have been comparing loans due to tiding over a financial crisis, you must have looked up a variety of short-term loans including vehicle title loans and payday loans. Though both of the loans have a short term repayments and high interest rates, it is difficult for most people to decide which the better choice is.
If you are among those with a low credit score and don’t have a bank account, you are not eligible for a payday loan as having a bank account is essential. Thus, vehicle title loans are more in demand as all that you need is a car. This short term loan requires that you keep the car as collateral to receive money against the value of the vehicle.
The best aspect of Phoenix vehicle title loan is that there is no credit check, no more waiting to hear whether you are approved or not. The vicious cycle of poor credit in turn can be ended by taking a auto title loan. When you pay the loan on time, your credit rating improves so in a way it is a method to enhance the sagging credit score. However, all of these loans are only for those above the age of 18 years and with a monthly income of over $1000 that can be verified.
Most people with low credit score or a bankruptcy on the report are turned away by the bank but they are eligible to try cash advance loans such as vehicle title loans. And there are a couple of reasons that most people prefer it:
- Credit score ratings are not a criteria for approval and so more people qualify for it.
- By taking the car title loan, you can rebuild your credit score by paying the loan on time which can help you rebuild the credit score.
- It is quick and you can go home with the cash within a few hours.
And that is why many people prefer taking the loan and get the cash quickly to pay off debts, medical expenses and any other financial requirement that is crucial. But in a payday loan, the lender’s security is based on the next paycheck that you’ll get even though automatic debit is set up as a prerequisite on your checking account at the time of the approval of the loan. Thus, you need to see which suits you better. Most of the short term loans have a high interest rate and check with your lender, weight out the pros and cons before taking any loan.