Have you saved enough to face any emergency financial situation that may hit you at the most unexpected time in future? The current way of living and the basic amenities are so expensive that even if you have managed to save a few pennies it is not going to be enough in the long run. Even if you try hard to live a normal life convincing that everything is self-sufficient, it is going to be a menace when life throws unexpected expenses and makes a mess out of it.The first thing you should be doing is to sort yourself out well and think of all the possibilities. If it is a situation where you need quite a big amount which cannot be borrowed from friends and family, then the safest option would be to borrow a loan from the conventional banks. However, to qualify for a bank loan you will need a stellar credit score with a flawless financial background.
If you belong to the category of people who have not-so-attractive credit scores, then the banks are going to downright reject your loan application. What now? The next best option would be the private lenders. But if you need a bigger amount of loan, then it cannot be taken as an instant payday loan. So, the next possible options would be to avail an installment loan or a title loan.
Although there are many variances in between the installment loans and the auto title loans, the primary dissemblance would be that – while the installment loan is an unsecured loan, the auto title loans are secured loans.
Both, installment loans and auto title loans are quick cash loans which can be availed from private lenders. Both these loans can be taken either using online tools or at brick & mortar. They are both available for bad credit scores. However, there are a couple of vital features that should be considered before deciding which loan is better suited to your requirements and limitations – the installment loans or the title loans.
Here is a brief about both the loans which could help you in making a decision to choose the right loan for you.
Installment loans are a type of the cash advance loan which helps borrowers to avail immediate finances during emergencies. They provide the gear for borrowing a larger amount of liquidity as a loan when compared to the instant payday loans. Also, they have larger repayment tenure so the loan can be repaid steadily over a scheduled period. Since the repayment period is relatively longer, the repayment is considered to be a sure thing. So, the interest rates are slightly lower than that imposed on the short term payday loans. Also, since they are unsecured loans, they have a slightly higher APR compared to the secured loans.
In an auto title loan, an automobile of the borrower is usually pledged as recoverable collateral in exchange for a loan. The lender has a lien on the title of the automobile and is given as barter for some instant liquidity. The lender will have a strong claim on the automobile and can possess it or resell it in case the borrower dodges the loan repayment. Since the loan comes with collateral, it is a secured loan and it carries a lower interest rate than the unsecured loans. A larger amount of money can be drawn with a title loan and it can be repaid in a systematic and orderly way. However, it is important that you repay the loan on-time, else it will lead to repossession of the vehicle.
So, explore well and make the right choices. Borrow only a small and the required amount of money as a loan so that it does not result into a financial albatross. Stay aware so that you do not fall into a debt trap while trying to get out of one and choose the most suitable option based on your requirements and limitations.
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