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BlogBlogAn Auto Loan Versus an Auto Title Loan

An Auto Loan Versus an Auto Title Loan

vsThe increasing popularity of auto title loans has created some confusion among the general population. Contrary to what some may believe, there are major differences between an auto loan and an auto title loan. While one is used to purchase the vehicle, the other can be used by those who own a car or truck. Here are those differences.

 

Auto Loans

 

When you want to purchase a car but cannot pay for it all in cash, you can apply for an auto loan to help you with the purchase. To obtain a car loan, you will most likely visit your bank, credit union, or other financial institution. The lender will carefully examine your work history and verify that you have the means with which to repay the loan. Your credit history will also be checked to ensure that you are not a credit risk. If you have a poor history of paying your bills on time, a financial institution will be less willing to loan you money.

 

Obtaining a car loan will take some time. The lender takes the time to ensure that it is making a good decision in offering the loan. It could take a week or two or, in some cases, a month or more. As a borrower, you can shop different lenders and see what terms they offer. Like buying a pair of shoes, different lenders will offer their own prices, or interest rates, and fees. Auto loans are usually longer-term loans. The typical car loan term is five years.

 

Auto Title Loans

 

You cannot qualify for an auto title loan until you actually own a vehicle. In most cases, lenders like Embassy Loans of Florida prefer that the car is paid off entirely. The vehicle then becomes collateral for the loan. Lenders will still offer a title loan to borrowers who have a balance on an existing car loan. A borrower who has $2,000 balance remaining and has a vehicle worth $10,000 or more is still a good candidate for a car title loan.

 

The process for obtaining an auto title loan is similar but much quicker. Potential borrowers fill out an application and provide documentation to verify their identity and residency. Applicants must present the title to the vehicle. The lender will then assess its value and develop the loan agreement. Borrowers normally have their money within an hour. A car title loan is generally for a much shorter period of time than a car loan. The typical auto title loan is for a period of a few months, though it can be renewed if not paid in full by the end of the term.

 

Car title loans and car loans differ in many ways. Both have their advantages and disadvantages. Title loans are great for those who need emergency cash and need it quickly. They also work for those who may have poor credit histories. A car loan is used to purchase a vehicle. The repayment terms are different, and the interest rates are much lower than those of title loans.



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.