Title Loans vs. Payday Loans: What's The Difference?

Many of us have seen the street signs or online ads: Get Cash Fast! Quick Payday Loans! In today’s turbulent financial setting, more and more Americans are living week to week. If they have a job, it can be a struggle to make it paycheck to paycheck.

It’s a reason that an industry has sprouted to service low-amount, quick-approval loans for individuals and businesses. Two of the most common are payday loans and car title loans. What is the difference, and which is best for your needs? Furthermore, when you decide which one will work best for you, how can you go about securing these loans in Texas? Here’s everything you need to know about title and payday loans.

Payday Loans: Smaller, Unsecured Loans

Let’s begin with a look at payday loans, because at first glance they may seem to be the easiest to deal with.

For starters, payday loans are an unsecured loan wherein you only have to provide your most recent pay stub to secure your loan money. As previously mentioned, they’re an unsecured loan which means that you don’t have to offer anything up for collateral in order to secure your payday loan.

For payday loans, Texas, you can secure up to $1,200 according to how much you receive on your paycheck. Paycheck loans are really geared for time-crunch emergencies for those months where you find your paycheck too small to cover your expenses. For situations where you’ve mis-budgeted or maybe spent a little bit over your carefully crafted budget, payday loans can help because, when compared to title loans, the amount is specifically smaller because it is meant to bridge the gap between paydays.

How To Apply For Payday Loans

Applying for payday loans Texas starts with you either calling into our stores or by you filling out and submitting a form found on our homepage. From there, the process looks like this:

  1. You’ll receive a call from a representative to review your information.
  2. You’ll be asked to provide a few pieces of information, which includes:
    • Your driver’s license
    • Your most recent paystub
    • A blank check to your bank account
  3. You’ll find out right there how much money you’ll receive.
  4. The money will be issued to you and you’ll receive it, often on the same day that you apply!

Title Loans: Larger, Secured Loans

In comparison, title loans are a secured loan type that allows you to leverage the value of your vehicle title in order to obtain up to $15,000 in loan money. These loans are meant to be taken out for large emergencies, such as home repair, a sudden medical bill, or the large expense that is sudden travel. Whereas payday loans are meant to bridge the gap between paychecks, title loans can provide much more in terms of emergency funds. These loans are easy to obtain and, while the process is a touch more complex than payday loans, it’s easy to follow and we’ll cover this next.

How To Apply For Title Loans

The process of applying for a car title loan is easy and similar to applying for payday loans in that you start your application online by filling out a form found on our homepage. Once you submit that, the process looks like this:

  • You’ll receive a phone call from a representative to review the information you’ve provided. They’ll also cover the next step of the application process, which involves a meeting to have your car inspected.
  • To this meeting, you’ll be asked to bring the following pieces of information to help expedite your application:
    • Your driver’s license
    • The title to your vehicle
    • Your vehicle for inspection
  • You’ll find out whether you’re approved and how much money you’ll receive during the meeting.
  • The money will be issued to you and you’ll receive it quickly!

Similar to payday loans, your credit score doesn’t matter when determining your eligibility for title loans because we welcome all credit – good, bad, and nonexistent. Furthermore, we’ve streamlined our processes to make them as painless and simple as possible and we’ll walk you through the steps to make sure you’re comfortable.

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Comparison of Title and Payday Loans

  • Payday loans can offer you up to $1,200 whereas title loans can offer you up to $15,000.
  • They can both offer same-day cash.
  • Neither of them takes your credit score into consideration.

When it comes to the emergency of needing extra money, Texas Car Title and Payday Loan Services, Inc. will always have you back. Serving several locations throughout the state, we’re ready to help you when you need it most so you’re not left struggling to make ends meet and handle your emergency. Now that you know everything about car title loans and payday loans near me, what are you waiting for? Start your application today.

 

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

Mason Roberts

Mason Roberts is a seasoned economics writer and blogger with a knack for breaking down and simply communicating the ever-changing world of finance. He is philosophically committed to the premise that financial knowledge equals financial freedom.