There are limited immediate cash loans options available to borrowers, especially those with bad credit. As such, it’s very important to understand how each option works and what those options actually are. In this post we will discuss two of these options – title loans and payday loan, explaining briefly how each loan works.
Fash Cash Title Loans and Payday Loans
Title loans are very popular for people who need to borrow cash, but don’t have any other resources. However, a lot of people also get into serious financial trouble and even end up losing their cars and their other best stuff because they don’t understand how these loans work.
Payday loans are very similar to title loans in that they are a way for people (even those with bad credit) to access cash fast. And, many people also get themselves into a financial debt trap by taking out too many payday loans becuase they don’t understand them either.
How They Work
Both types of loans function very similar. They are both short-term loans that give you cash today, cost a lot to take out (very high interest rates), and are available to bad-credit borrowers. The only real difference is that the title loan is a secured loan – you secure the loan with the car title, meaning that the company can come take your car away if you don’t pay off the loan ontime and/or in full. Payday loans are unsecured loans, meaning that the company can only come after your name but cannot reposes your car, or other assets to collect on the loan.
The main area where people get into trouble is with the length and timing of these loans. So many people take out payday and title loans when they are in distress and they don’t think about how or if they will be able to pay them back in full ontime. They always assume they can, but due to the fact that the average borrower takes out 8-12 loans tells us that they don’t really sit down and figure out how they are going to pay them off. Then, they end up simply extending or taking out new loans to pay for the old ones – which is a very hard trap to get out of.