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BlogBlogCar Title Loans Versus Payday Loans

Car Title Loans Versus Payday Loans

2nd jobIn times of financial emergency, most individuals will have difficulty in trying to obtain a conventional loan from their financial institution. As a result, many turn to alternative forms of lending such as payday loans and car title loans. Both have their advantages. Here is a look at both.

Payday Loans

 

A payday loan is an unsecured loan that is based upon an individual’s monthly income. As long as you have not defaulted on payday loans in the past, getting approved for one is relatively easy. Borrowers can visit a physical location or apply for a payday loan online. If visiting in person, the application process is quick and the borrower receives his or her money the same day. Online lenders will deposit the funds the next business day. In both cases, borrowers leave a post-dated check to cover the future payment. The typical loan period is only two weeks, the same as most employers’ pay schedules.

 

Failure to repay a payday loan will result in the debt being sold to a collection company. The bad debt will show up on the borrower’s credit report. Most payday loans are for sums of money between $300 and $1,000 and are used for emergencies.

 

Car Title Loans

 

A car title loan is a secured loan where a vehicle is used as collateral. Most lenders, like Embassy Loans of Florida, prefer that the vehicle is paid off and that it is 10 years old or less. Prospective borrowers fill out an application and present proof of identity and the title to the vehicle. The lender determines the value of the car or truck and writes the loan agreement.

 

Title loan companies will only allow individuals to borrow roughly 30 to 50 percent of what a vehicle is worth. If the loan goes into default, the lender can take possession of the vehicle and then sell it to recover most or all of its losses.

 

Like payday loans, car title loans do not require a good credit history. The loan is not based upon an individual’s credit and the vehicle provides collateral if the borrower fails to repay. As long as the payments are made on time, borrowers get to continue to use their vehicle.

 

Car title loans are usually taken for sums of money larger that payday loans. The average car title loan nets a borrower approximately $3,000. The terms of repayment are also much longer than the average payday loan.

 



Embassy Loans is a leading provider of auto title loans since 2005

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Embassy Loans Inc. is licensed under the “Florida Consumer Finance Act” and as such Embassy Loans is exempt from any licensing requirements under the “Florida Title Loan Act” to the extent that any of Embassy Loans’ activities involve the making of a loan of money to a consumer secured by bailment of a certificate of title to a motor vehicle.

Monthly Interest Rates range from 1.5% to 2.5% (18% to 30% APR), with 15-18 Month Terms.

No Prepayment Penalties!

Embassy Loans uses “Title Loans” for advertisement purposes only and provides auto equity loans. Embassy Loans Inc. is licensed under the “Florida Consumer Finance Act” under Florida Statute 516 and as such Embassy Loans is exempt from any licensing requirements under the “Florida Title Loan Act” to the extent that any of Embassy Loans’ activities involve the making of a loan of money to a consumer secured by bailment of a certificate of title to a motor vehicle.

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Frequently Asked Questions

What is an Auto Equity Loan?

An auto equity loan, sometimes known as a car title loan or a car equity loan, is a type of loan that allows you to borrow money by using your vehicle as collateral. The loan is secured by your vehicle, meaning you agree to use the equity in your car to back the loan. 

What is an Unsecured Personal Loan

An unsecured personal loan is a loan that does not require collateral. Funds are provided based on your credit worthiness and your ability to repay. 

What Is the Credit Builder Program

The credit builder program is designed to help individuals establish or improve their credit score with the primary purpose of building a positive credit history through regular payments.

Can i have more than one Loan at a time?

Embassy Loans can only extend one loan at a time and it’s advisable to start with one and focus on making payments in a timely manner to prevent default.

What happens if I miss a payment?

Missing a payment can have negative consequences, including late fees, a drop in your credit score, and potential default on the loan. Consistent, on-time payments are crucial to benefit from the program.