If you’re thinking about applying for a payday or car title loan to finance a big purchase or pay for emergency expenses, chances are you have some questions about the pros and cons of these financing options. While payday loans and car title loans in AZ can be good options for many borrowers, especially those with poor credit, it’s important to be aware of the drawbacks associated with these loans. Keep reading to learn more about payday loans and auto title loans in AZ.
What are payday loans?
Payday loans are short-term loans that are typically relatively small and are meant to be repaid after a borrower’s payday. In most cases, payday loans are given in amounts of $500 or less, and they are used to cover bills or emergency expenses that come up before people receive their paychecks. Usually, payday loan terms are for two to four weeks. Borrowers give authorization to lenders to take the loan amount from their personal bank accounts on the date of their next paycheck.
The biggest drawback of payday loans is that they typically have very high interest rates. Interest ranges from $10 to $30 for every $100 borrowed, and that kind of interest can really stack up for borrowers, especially if they’re having trouble covering bills between paychecks. In addition, it’s important to do the math in advance of taking out a loan to make sure you can afford to pay it back in full when it’s due.
What are auto title loans?
Auto title loans are loans that are secured using vehicles as collateral. Borrowers give their vehicle titles to lenders, who hold onto them until the loan is repaid in full. Car title loans are usually worth about 25 to 50 percent of the car’s value. Once the loan is paid off in full, the lender removes the lien on the car and returns the title to the borrower. During the loan term, which usually lasts 15 days to a month, the borrower can continue using their vehicle as normal.
Car title loans in AZ offer a great option for borrowers who need quick cash and don’t have the credit necessary to qualify for traditional financing. However, like payday loans, car title loans have high interest rates that can add up for borrowers, especially if they aren’t paid off on time. The monthly finance fee for car title loans is 25 percent on average, and there might also be some additional fees charged by the lender.
Auto title loans in AZ
At Cash-N-Go Auto Title Loans of Phoenix, we know how difficult it can be to secure quick financing, especially for people who have problems with their credit, and that’s why we’re committed to providing quality financing options through auto title loans in AZ. Our team is here to get you your loan as quickly and conveniently as possible, and we are proud to provide many of our applicants with cash in hand in as little as 30 minutes. Come see us to learn more!
Categorised in: Title Loans