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Today will be discussing the differences in the title loan and a payday loan. Title loans are loans that are given to you based on the fact that you have the title to a vehicle. The amount you can borrow is dependent upon the value of your car and how much of your cars title is owned by you. For example if your car is worth $15,000 but you owe $12,000 to bank you can only borrow $3000 in the form of the title loans.

This is because if they need to cash out on the title then they will have to pay the bank 12,000 of the $15,000 that they earn from the vehicle. Payday loans on the other hand are dependent upon the amount of your next paycheck. The amount that you're able to borrow is the same as your next paycheck. There are times in which a payday loan will allow you to borrow to pay checks at a time but this is dependent on circumstances.

A title loan can often be a better option than a payday loan as they tend to have slightly lower interest rates because of the collateral of your vehicle or fax the loan. This allows you to borrow money that perhaps would not otherwise be available to you based solely on your credit at rates that are better than you could get from a loan such as a payday loan. The type of loan which you ultimately decide to seek out is a matter of personal preference and all factors should be weighed before deciding on one type over another.