Title Loans or Payday Loans: Which Is Better for You?

Though unfortunate, unexpected emergencies happen, and they happen all the time. If you haven’t already, you may one day come face to face with the harsh reality that not everything will work in your favor, and an unforeseen financial emergency is a perfect example.

When this happens, you may need to find a lender, like us, at Utah Title Loans, Inc., to get the quick emergency loans you need. We offer short-term loan options with our payday loans and title loans. Keep reading to find out more about these fast cash loans before you apply.

Payday Loans vs. Title Loans

Financial emergencies can come from anywhere and can strike at just about any time. And we’re already neck-deep into the most financially vulnerable time of the year: Christmas.

If you’ve already fallen victim to a financial emergency and you have no other options for financial relief, a car title loan or a payday loan could offer some relief. But which loan should you choose then? That’s entirely up to you. But what are your options, and where do you start? Let’s take a closer look at these short-term loans and see how they measure up against each other.

Payday Loans

Payday loans work very simply. In exchange for a postdated check, a payday lender will offer you a short-term cash loan. “Short-term” must be emphasized here as the term of most payday loans is usually only two weeks. Your local lender will be able to tell you exactly how long their lending term is.

Since there is a finance charge tacked on to the loan, a lender will ask you to write a check for the loan amount plus the amount of the finance charge. The check should be dated for your next payday. This way, once you’ve been paid, the payday lender can cash the check.

If your check bounces, other fees and penalties may apply. The only real benefit to payday loans is that they’re unsecured. You don’t need to put down any collateral to get cash. Always be sure you’re able to pay the payday loan in full by the end of the loan term before signing any payday loan agreement.

Payday Loan Requirements

• A valid driver's license or state-issued photo ID
• Most recent pay stub
• A blank check from an active checking account in your name

Title Loans

Car title loans work a little bit differently than their payday loan cousins. Unlike payday loans, title loans do require collateral: namely, the title to your car. While the title loan lender would be holding your car’s title during the loan repayment term, they will not have access to the car itself. This is good news since you still need your car to get to work, buy groceries, run errands, etc.

Also, title loans come with longer terms than payday loans and allow you to borrow much more, too. However, you should only borrow what you need. These loans come with a hefty price tag if they’re not paid back on time. Proceed with caution and make sure you understand all the terms before entering into a signed agreement.

Title Loan Requirements

• A valid driver's license or state-issued photo ID
• A lien-free vehicle title
• The vehicle itself for an inspection

Fast Cash Loans Comparison: Payday Loans vs. Title Loans

Feature	Payday Loans	Title Loans
Collateral Needed?	No	Yes (car title required)
Loan Amount	Small (< $100–$500)	Larger ($300-$15,000 depending on vehicle’s value)
Repayment Period	Around 2 weeks	30 days or more
Interest Rates	Very high (often 300%+ APR)	High, but generally lower than payday loans
Risk	Debt cycle due to rollovers	Risk of vehicle repossession

Need quick emergency loans? Compare your options for borrowing. For example, if you need $200 until payday and can repay in two weeks, a payday loan might be an option. However, if you need $1,500 for car repairs and need more time to pay, a title loan could be a better fit for your needs.

The Verdict: Get Started Today!

If you need a small loan and can repay it within two weeks, a payday loan may work. If you need more money and can handle longer loan repayment terms, a title loan might be a better fit. Always compare options and understand the risks of fast cash loans like these before borrowing.

Use the online inquiry form to speak to your local lender today to get more information so that you can make the best decision for your emergency.

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