| In this article we take a look at car title lenders vs. the | | | | maximum amount is 36 percent so both types of |
| payday cash loan lenders. This comparison will include | | | | lenders don't do business in those states. |
| collateral, cost, payback, state regulations, and | | | | In 2008, eight states are considering either new |
| legislation, restriction, requirements and which to | | | | legislation or tougher regulations for the various car title |
| choose. | | | | lenders. Before that in 2007, 16 states took on the |
| Regarding collateral, payday cash loan lenders require | | | | vehicle and car title lenders. Six of those states |
| a personal, postdated check as the collateral for a | | | | passed regulations. |
| payday loan. And car title lenders require the title to | | | | In 2006 congress passed a law that took effect in |
| your car or other vehicle, which they then put a lien on. | | | | 2007 prohibiting all of the payday lending companies, |
| They also require a duplicate set of the keys in case | | | | vehicle title lenders and tax refund anticipation |
| they end up having to repossess it. | | | | operations from charging members of the military or |
| Payday loan lenders in most of the state usually | | | | anyone in their families more than 36 percent interest |
| charge about $15 for each $100 they loan, which | | | | on any loans. |
| makes the annual interest rate about 400 percent for | | | | Both no credit check payday loans and no credit |
| the average two-week loan. The maximum loan | | | | check car title loans are fast and easy to arrange and |
| amount is usually about $500. This compared to car | | | | yes, both require no credit check. The quick cash |
| title lenders who usually charge about 300 percent | | | | payday loan online stores and brick and mortar stores |
| interest and fees including a membership fee and a | | | | both require an open checking account and your |
| small fee for recording the lien they put on the title. The | | | | identification. The car title lenders require the borrower |
| maximum loan amount usually is about $2,500. | | | | owns the car or vehicle they are using for collateral. |
| Usually cash advance loans are due in about two | | | | Both the payday cash loan lender and car title lender |
| weeks, or whenever the borrower gets their next | | | | are often mentioned as the only option for those who |
| paycheck. In most of the states that offer car title | | | | might not qualify for a loan from their bank or a credit |
| loans, they are due in 30 days. In Virginia, the title | | | | union. And they both rightfully claim that their loans are |
| lenders work under open-end credit laws. That means | | | | only for short-term, emergency use instead of any |
| there is no set due date, but the lenders can't charge | | | | long-term financial solution. |
| interest for the first 25 days of the loan. In some | | | | If you have to make a short term loan it's easy to see |
| states, the title lenders keep all the profits when they | | | | that the payday cash loan advance would be the |
| sell a car or other vehicle that has been repossessed. | | | | lesser of two evils. The interest may be a little higher |
| The fast payday advance lenders operate in 37 | | | | but the additional fees may eat up the difference. The |
| states compared with only 21 states that have the car | | | | cash advance loans can be helpful if they are only |
| title lenders. And a dozen of the states have limited | | | | used for a temporary situation in which you KNOW |
| the annual interest rate on all small loans. Usually the | | | | you can pay them back when due. |