Getting a personal loan is always a difficult job, especially when your credit score is low. Credit score goes down for many reasons. It is not all about paying the credit card bills on time. Even though you give the bills on time, you may observe that your credit score is low. Mainly, new credit card owners find it quite difficult to enhance credit in a short period. When you are busy in getting a good credit score, a sudden financial crisis may hit you at that point. So, what is the way out? You need to look for personal loans from a right lender.
When it comes to bad credit loans, you have two good options. One option is a payday loan, while the other option has been known as title loan. We shall try to find differences between these two types of personal loans.
The Basics of Payday Loan
A payday loan is a simple as well as the useful option for a personal loan. This kind of loan is famous among the borrowers, especially if they have a low credit rating. Low credit rating is a serious concern when it comes to applying for a loan. No financial organisation shall approve your request for the loan. Hence, a payday loan can become a saviour for you in such instances. It has many advantages as well as drawbacks.
The primary advantage of payday loan is that it is a bad credit loan. This means you can opt for a loan even if you posses negative credit rating. The lender shall not ask you to show any credit score. Instead of credit score, it shall check your bank statement of last six months. If you have been noted to have steady earning, direct payday lender shall grant your loan application. Another good thing is that payday loan can be noted as fast loan. Approval of application takes only a few hours, and loan amount has been disbursed to your account within 24 hours.
Basics of Title Loan
Unlike payday loan, title loan is a loan that has been offered against your vehicle’s title or logbook. This is why this type of loan has also been known as logbook loans. The most notable difference between title loan and payday loan is presence of collateral. In case of title loan car’s title has to be given to lender as collateral. This is, however, another quickest method of getting personal loan. It will take only a few minutes to complete the process of having an individual in this method.
Which Is Better?
It is hard to say which type of loan is better for the borrowers, as both of them have pros and cons. A payday loan does not need collateral, and thus rate of interest could be a little high. Title loan amount will not be satisfactory if your car is old. Used car owners may also get difficulties to get such loan.
Christopher Mark is the author of this article, and he is a veteran consultant for various logbook loans for organisations as well as individuals. In his articles, you can find tips to find the best direct payday lender.