It’s nice to know that if you are in need of quick cash, there are plenty of vendors that are ready to help, even if your credit is atrocious – particularly online.
Online title loans and installment loans and give you the chance to fix your short-term financial issues without having to mortgage your long-term financial future. With so many online lenders to choose from, however, finding the right service can be a bit of a tall task. Even figuring out whether you should use title loans or installment loans for your specific situation can be a hassle!
Armed with the inside information below, however, you’ll be able to quickly navigate the financial opportunities you have available to get yourself set up for success without crippling your short-term or long-term financial situation!
Online Title Loans
Online title loans are vehicle collateral loans that require a clear title in exchange for a loan. Lenders are going to assess the value your car and then offer you a set amount of money that they are willing to lend you, with your vehicle and its title securing the loan.
Pros
The benefit here is that you do not have to have stellar credit to qualify for these kinds of loans. Because your vehicle and its title is going to act as security, the lender couldn’t care less whether or not your credit is good, great, or absolutely abysmal. Your car and the title is more than enough to help you get your hands on the money you need.
Secondly, lenders like 800LoanMart and Titlelo Title Loans that offer their services online help you get your cash whole lot faster than you would have been able to with banks. It isn’t at all uncommon to receive the funds directly deposited into your account inside of 24 hours, and very frequently even faster than that.
Cons
At the same time, you are going to be putting your car up as collateral and if you do not make good on the terms of your loan you run the risk of forfeiting that vehicle. That is going to put you in even bigger financial trouble moving forward, particularly if you need your vehicle to work!
Secondly, online title loans usually have sky-high repayment terms and APR interest rates associated with them. They are also usually short-term loans that need to be repaid in a hurry, something you will need to be aware of as well.
Installment Loans
Online installment loans, on the other hand, are similar to the traditional loans you get from a local credit union or bank, only they are facilitated with nontraditional lenders over the internet. Contrary to title loans, installment loans are underwriting with a fixed amount of payments that need to be covered – usually every month, but sometimes weekly or biweekly – as a repayment schedule.
Pros
The big benefit here is that these kinds of loans aren’t going to require you to put up a lot of collateral or security. On top of that, the type of nontraditional lenders that offer these kinds of loans will usually report to all of the major credit bureaus – giving you an opportunity to rebuild your credit with short-term loans like these.
Installment loans are also considered by many in the financial services industry to be safer than payday loans or car title loans. You will not have to worry about losing any collateral (as we touched on above), but you also won’t have to worry about predatory interest rates and APRs, either.
Cons
Of course, on the flip-side, Installment loans are unsecured. As a result, you’ll need to have at least pretty reasonable credit to qualify for them. Some people aren’t going to meet the minimum credit reporting requirements necessary to get these loans, which can be a real hassle when you need money in a hurry.
On top of that, the overwhelming majority of these loans only go up to $5000 or so. The repayment timeline on these loans is relatively short compared to those offered by traditional lenders, which means higher installment payments necessary during each repayment period.
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