Financial hardships come to all of us at one point or another in our lives. It’s never an easy task making enough money to meet all of life’s needs. When you fall on difficult times, you might consider using the equity in your vehicle to get some quick cash. But what is the difference between a title loan and a title pawn?
A Title Loan IS a Title Pawn
There is no difference between a title loan and a title pawn. They are simply called different things depending on which area of the country you live in.
What is a Title Loan?
A title loan is a type of collateral loan where you trade in the pink slip to a car or motorcycle that you currently own in exchange for money in the form of a loan. The amount of money that you receive in your loan depends on the age and condition of your vehicle. Then you must make the monthly payments that you agree to in the loan documents. Once the loan is paid in full, your car’s pink slip is returned to you. Keep in mind you have to own your vehicle outright, and you can’t have any liens or judgments on the vehicle. Also, most title loan companies require that you prove that you have the ability to repay the loan, usually through employment verification or proof of another source of income.
Is it right for me?
Title loans or title pawns are a great benefit if you have no other option
and you need money quickly. Interest rates are typically higher than bank loans, but bank loans can take a while to process, and if you have bad credit, your bank loan application could be denied altogether. Title loans do not take your past history into consideration, so if you have bad credit or no credit, a title loan is a great way to get a loan. Do yourself a favor and read the contract documents before you sign. Be sure you know what you’re agreeing to in your loan documents, as they are considered legally binding once they are signed. Check interest rates, fees, as well as penalties so you can make an informed decision.
If you need money quickly and you have nowhere else to turn, consider using the equity in your vehicle to get a title loan. Title loans can get you the money you need when you need it most.