Are There Any Other Short Term Lending Options To Consider?

choose your the best choice to use your vehicle collateral
Written By Dara Chan

Because you think you need a car title loan doesn’t mean it’s the best option for your particular situation. The good news is you probably haven’t made a financing decision yet if you’re reading this article. Before moving forward with a title loan or a payday loan, we recommend that you look at your entire financial situation. You may think it’s strange, but we don’t always recommend a vehicle equity loan to applicants on this site. Many Arizona residents come to who need a title loan in Phoenix are often looking to use their vehicle as collateral. Only to find out there are better options available for their specific financial situation.

Traditional bank loan Most people in need of short term cash will be familiar with this type of loan. Banks and credit unions have offered personal loans for years. Anytime you can borrow cash from a bank is a great choice for someone who qualifies. The problem here is the fact that you need to qualify. Like a mortgage loan or student loan, banks in Arizona are going to want to reduce the risk they take on. It’s hard to pinpoint the exact credit score or rating you’ll need to qualify. But it’s safe to say you won’t get very far with bad credit or anything less than an excellent credit score. Contact your local bank or personal lender(there are hundreds in the Phoenix metro area) and see if they will work with your situation.

Installment loan This type of funding is different from a payday loan and an auto title loan. In some cases you will be looking to borrow a larger amount of money. However, you will deal with a high interest rate and some companies won’t even talk to you if there are credit issues. With that, it’s a better way to go if you’re also considering a title loan. With installment loans, an applicant is not going to give up their vehicle’s pink slip as collateral. Someone who qualifies for loan amounts will get an unsecured advance. The downside with this loan application process involves the fact that you need good to great credit to get an approval. Similar to bank financing, your credit report is the most important factor that a bank looks at. The borrower won’t run the risk of losing a vehicle because they handed over a vehicle title for the loan’s collateral. Many local companies in Phoenix are ready and willing to provide different variations of a personal loan. The downside is that you’ll have to meet with them face to face.

Payday loan or cash advance With a payday advance a borrower will get a small amount of money that needs to be paid off quickly. Look into cash advance options in AZ before you hand over a pink slip. We all know the downfalls of what comes with a payday loan. The interest rates are sky high and it’s difficult to pay off the loan in full by the time it becomes due. It’s somewhat of a moot point as here in Arizona most payday loans and cash advances are not allowed anyway. You can read all about the State’s views on payday loans in Arizona by going to State’s Consumer Protection Website. They are a possibility in other neighboring states like California and Nevada. But it really comes down to how much money you need to borrow and what you can qualify for. We understand there are few other types of short term loans available to consumers in Arizona. These include a credit card advance and other forms of borrowing to be paid back within 30 days. Many of these online loans are offered by offshore companies and tribal lenders. The loan application process can be questioned in this case. It’s always going to be the best course of action to stay with reputable companies and go with title loan lenders who offer real loan amounts.

Keep in mind, an auto equity loan has high interest rates and you run the real risk of losing your vehicle if there’s ever a default! Often, your lending company will only give you 30 days to get back to current before they sell your vehicle! If you have a chance to qualify for any of the options above you at least need to look into them. No one wants to be in a situation where they lose their only source of transportation to a repossession. The state of Arizona has strong laws in place to protect consumers who face a vehicle impound. But it’s not always easy to get your car back if you default on a car title loan. Likewise, you don’t want to pay a lot of money in finance charges. Go with the options above and you’ll save money and won’t have to worry about losing your car.

Dara Chan