Why I Chose a Title Loan Over a Payday Loan

Just had a chat with a friend that got a payday loan, I tried to talk them out of it but I couldn’t!

So I wanted to share my story, and why I think payday loans are so bad and should be avoided.

Not too long ago I found myself in the unenviable position that many find themselves in. I needed money, and I needed it fast. I won’t go into why, but it was a legitimate reason I swear!

With my bad credit, all of the more ‘traditional’ options were unavailable to me. So I started looking into title loans and payday loans. Dubbed as quick fixes for the desperate or financially illiterate. They both sounded perfect for me. But I retained enough of my senses to realise that I could only pick one without spiralling out of control.

After much deliberation, I found a lender offering title loan near me and went with it. There are a few reasons why I chose a title loan over a payday loan.

  1. Amount

Assuming your car is worth a decent sum, title loans offer more money than the alternative. I needed to borrow $2500. Perfectly fine against my car with a title loan. Less fine with payday lenders who usually stop at around the $1-1500 mark.

  1. Longer term

While I wanted to pay it back ASAP to avoid the crazy interest rates, I didn’t want to pressure myself with the 2-week deadline of a payday loan. With a title loan, I bought myself up to a year to pay it off.

  1. Interest rates

They’re both bad, but payday loans are worse. I got a loan with an interest rate of 90%, the average for a title loan. With a longer length of time taken to pay it back, it’s a good job it’s less, to be honest.

  1. Credit rating

In a bad situation, I may have been. Stupid I am not. Title loan companies report to the credit bureau, so as long as I can keep up with the payments, my credit rating will improve. Leaving me better off than before.

  1. I had no job

I had lost my job at the time. And to get approved for a payday loan you have to prove you are employed as security. So they know that you’ll actually have a ‘payday’. The clue is in the name. The title loans company used my car as collateral. Which is something I did have to offer.

So far, I stand by my choice. No ‘title loans hell’ to report yet. Site I used to find a loan was financeflamingo.com, google maps also works. Make sure you read reviews of a place before you get loan! Some of the companies are very “shady”.