In many ways, a car title loan is similar to a pawn shop loan, although there are some differences as well. If you are looking for a quick source of cash, it may be worthwhile to consider these types of loans. Make sure you understand the differences and similarities to help you choose the one that will better suit you.
The major similarities between a car title loan and a pawn shop loan lie in the way the loans work.
● Require security – Both of these types of loans require security which you use to get your loan. In the case of a car title loan, your car title becomes the security for the loan, while in the case of a pawn shop loan, whatever item you pawn will become the security.
● Loan amount based on your security – In both cases, the amount you are offered as a loan will be based on the value of your security.
● Fast cash – In both cases, the cash can be available almost instantly – within the hour in the case of a car title loan.
There are some major differences between a car title loan and pawn shop loan that may help you decide which will work for you.
● Get the cash and keep the car – In the case of a pawn shop loan, you will leave your security at the pawn shop when you get the cash. With a car title loan, you will leave your car title at the lender, but you get the cash and get to keep your car.
● Larger loan amounts – A car title loan offers an amount based on the value of your car with amounts up to around $20,000. The amount you can pawn at a pawn shop is generally significantly less than that.