When you find yourself unexpectedly on the hook for a big expense (think a costly unexpected home repair or medical bill), you’ll need to find a quick way of getting yourself the cash you need to pay those bills off. Title loans and registration loans are two examples of quick and easy loans you can get in these circumstances. However, many people do not sufficiently understand the differences that exist between these types of loans, which can naturally lead to a bit of confusion.
First, let’s clarify exactly what a registration loan is. While a title loan uses the vehicle’s title as collateral, a registration loan does not involve the use of any collateral at all, and does not require you to own your vehicle outright. The requirements that exist for a registration loan are simply that you have a valid driver’s license and vehicle registration, that you are either leasing or financing the vehicle in your name, that you have all current information related to your vehicle and that the vehicle will not be repossessed or have any liens on it during the life of the loan.
Again, auto title loans and registration loans are not the same thing. Here are the primary differences:
- Title loans require you to have a clear title for the vehicle under your name, while registration loans only require that you have the registration under your name. This is a significant difference.
- The amount of money you can get from a title loan is based primarily on the value of your vehicle. The amount of money you can get from a registration loan, however, is primarily determined by your current income and employment status—the value of your vehicle is not going to play a factor in your application.
- In general, the amount of money you get from a registration loan is going to be smaller than what you’d get from an auto title loan, so the use of a registration loan may not necessarily be enough to get you all the money you need to cover certain types of expenses.
- You can expect to have higher interest rates associated with a registration loan. This is primarily due to the fact that you do not have to put up any collateral to get the loan, unlike with a title loan. This sort of give-and-take is worth considering when determining which is the best option for you, given your circumstances.
So, there are several advantages to title loans over registration loans. You get lower interest rates and can get more money when the loan is approved. Neither of these types of loans require credit checks, though, and both will get you money much faster than other types of loans you’d receive and can be paid off much quicker.
If you’re interested in learning more about auto title loans and registration loans, the differences between them and whether or not you can or should refinance a title loan in Phoenix, we encourage you to contact Cash-N-Go Auto Title Loans of Phoenix today with any questions you have.