What Is The Difference Between Payday And Title Loans In Idaho?

Those looking at alternative funding to help with some urgent expenses during the winter may wonder whether a title loan or a payday loan will work for them. There are some differences between each of these loans and those differences can help you decide which one is best for your needs.

In this article, you’ll find out the difference between payday and title loans in Idaho, how to choose between payday and title loans, and which is better: payday or title loans? Keep reading to find out more about each of these loans.

How Is Alternative Financing Different From Traditional Loans?

Before looking specifically at title or payday loans, you need to know a little about alternative financing. These are loans offered by private lenders rather than traditional financial institutions like banks. Private lenders have laws and regulations that differ from banks, credit unions, and other financial institutions. They are monitored by both the state and federal governments under banking laws. 

Private lenders fall under state law for providing loans, not banking laws. That means private lenders have leeway in their requirements and making approval decisions. What that means for those seeking quick cash is that a private lender will allow those with bad or no credit, those who haven't been on the job a long time, and others to seek loans when a bank would turn them away. That opens up financial options for many people who have costly emergencies but do not meet the strict guidelines for traditional loans.

Title Loans

A title loan is a secured loan you take out based on the value of your vehicle. You keep your vehicle while you are repaying the loan. The lender holds only the title to secure the loan. 

Title loans have higher maximums than other types of alternative loans with the borrowing amount based on the vehicle's value and your ability to repay. They can be a solution if you have an expensive home repair, medical bill, or other expense where you need a few thousand dollars. 

Payday Loans

Payday loans are like a cash advance on your paycheck. A lender gives you money and it's repaid the next time you get paid. These amounts tend to be smaller. However, some people only require a small amount to fix a problem. Many traditional financial lenders would never consider such a small loan but private lenders offer such amounts with payday loans.

You don't have to put up any collateral with a payday loan. Your job is your credit. 

Comparing Payday Loans Vs Title Loans

When comparing payday loans vs title loans, you’ll find that these loans have one thing in common. Neither base their approval on credit. That means credit scores don't matter like they do for traditional loans. Private lenders also don't report these types of loans to the three major credit bureaus. Under the law, they aren't required to. Because of this, you won't see a drop in your score. That's a big plus for those trying to rebuild their credit. 

Which Is Better: Payday Or Title Loans?

One of the biggest differences between title and payday loans is the amounts offered so the one you pick is likely going to be based on how much money you need. 

While a payday loan requires a checking account, a title loan doesn't with most lenders.

Alternative Financing In Idaho: How To Choose Between Payday Or Title Loans

Those looking at either a title loan or payday loan have Idaho Title Loans, Inc. to give them information and options. This private lender offers both.

Title loans have up to as much as $15,000 in maximum lending amounts. You will need a driver's license or state-issued identification, a clean title to your vehicle, and the vehicle that matches the title available for a quick inspection. 

Their payday loans range between $100 and $500. Those wanting those should have a driver's license or state-issued ID, their current pay stub, and a blank check from an open and active checking account that lists them as the account holder. 

The Process: Title Loan Vs Payday Loan Pros And Cons

This private lender makes getting approved for these types of loans simple. It starts with filling out an online inquiry form with your basic information. That form is then sent to the store nearest you. A loan representative will call you to explain the rest of the process and answer any questions you may have. They will also schedule an appointment for you to talk to a loan representative to help you further. 

For a title loan, you can either visit a store location or meet a loan representative at a location you choose. They will go over your required items and inspect your vehicle. Then, you finish up some paperwork and get a decision by the end of the meeting. 

Pro: Title loan amounts of up to $15,000 are available to those in a financial situation that requires a larger sum of money. However, the amount you qualify for will depend on the value of your vehicle.

Con: Requirements include a lien-free vehicle title as collateral to secure the loan. This means only those who own a vehicle outright will qualify. Defaulting on payments for this type of loan can result in the loss of your vehicle.

Those seeking a payday loan will go to a store where a loan representative will validate your required documents and guide you through some simple paperwork. You will also get a decision while you wait. 

Pro: A payday loan offers up to $500 and does not require collateral to secure the loan, so those who only require a small amount of money to pay an overdue bill can benefit from this lending option. The repayment for this type of loan is typically paid off with your next paycheck, which means you will not worry about carrying this debt over months.

Con: The loan amounts are much smaller than title loans, so if you require more money to resolve a financial emergency, this may not be the option for you.

With both loan options, the meeting and decision could take as little as 30 minutes, which could be helpful in a high stress situation. Those approved for either loan will get their money either the same day or the following business day. 

Submit The Inquiry Form Today Through Idaho Title Loans, Inc.

Filling out the form will give you an option for funding your urgent need. You aren't obligated to take out a title loan or a payday loan but Idaho Title Loans, Inc. is willing to help those who do. 

Both loans offer a way to get fast cash when you need it most. To get started, submit the Idaho loan form today to see what this private lender can do for you. 

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