How to Decide What Type of Loan Is Right for You?
Everyone has been there at some point– an emergency happens, or a bill pops up, and you are not prepared for it.
23:16 03 March 2023
Different Loans Can Offer Different Solutions
Everyone has been there at some point– an emergency happens, or a bill pops up, and you are not prepared for it. There may not be enough money in your savings to cover it! Looking for cash when you don't have it can be highly stressful. Asking friends or family members for help can be uncomfortable, and not everyone has high enough credit to obtain traditional bank loans.
People with limited financial resources can consider secured loan options when they need help! Instead of relying on your credit history, you can use alternative means to access cash quickly. Examples include title loans, payday loans, and cash advances.
Determining which loan option is right for you means learning what each can offer. But it can be tough to decide what type of loan is right for you! Below are the financing options available to people with bad credit or who need money quickly.
Start your title loan inquiry today by filling out this pre-approval form or calling to speak directly with a LoanMart title loan agent.
What Are Secured Loans?
Secured loans are financing options that rely on using collateral in exchange for money. A bank or lending institution can fund people who use assets as insurance. They can legally repossess the property used as collateral if borrowers don't repay the loan.
Examples of secured loans include mortgages, auto loans, and car title loans. An asset is used to secure the loan. Borrowers may potentially enjoy a lowered interest rate with this type of financing because there is less risk on the line if the funding is not repaid.
Applying for secured loans could be a better option if you have a bad credit score. Traditional banks look at credit history when determining a person's approval for unsecured loans. If your score is too low, it can indicate that you are irresponsible with your money.
Secured loans will consider your credit score during the application, but there are other approval factors. For example, with car title loans, lenders care more about how much equity is in your vehicle and if you have the income to repay the money.
Loan Options for People With Bad Credit
A bad credit score can limit many aspects of your life and make you feel like you have no options. However, there are loans available to people with rocky financial backgrounds! Accessing money quickly could be crucial if you're struggling to pay your bills. Below are examples of loan options people can apply for when they have poor credit scores:
Car Title Loans:
Car title loans work by allowing people to borrow money using the available equity in their vehicles. This option can be great for people with bad credit because lenders care more about your car's value and if you can repay the money.
Your car's value can determine your loan amount, and qualified borrowers typically receive anywhere from 25-50% of this number. You can apply for title loans online from the comfort of your home and may obtain access to money within the same business day as inquiring!
Payday loans are short-term, high-interest loans that allow a person to receive extra cash before their next work check. The loan amount for a payday loan is based on how much you earn, and you typically must show proof of a pay stub to qualify.
This loan can be helpful if you need a little bit of cash quickly, but you won't receive a substantial amount! Payday loans tend to be a couple of hundred dollars at most.
A cash advance means taking out cash from the available line of credit on your credit card. Essentially, you are borrowing money from yourself with this loan option. You may experience higher interest rates and typically only have until your next bill is due to repay that amount. This loan can be helpful if you need to access a small amount of cash quickly, but not great for people who need money for a larger emergency, like paying rent.
Decide What Type of Loan is Right for You Today
Not paying your bills can cause a lot of problems in life. If you need help with your finances, applying for a car title loan could be the solution! Qualified borrowers may access cash within the same day as applying. Start today by filling out this pre-approval form for a title loan or calling to speak directly with an agent.