Difference between Car Equity and Car Title Loanby Malini Somra Blogger
Well, there is plethora of lending options available in the market, car equity and car title loans are two different types of car loans. Both types of loans can offer you money for emergency purposes but if looked closely, they do have a subtle difference between them. Moreover, if you are also looking for a car loan, it may be perplexing to decide what one should opt between the two. So here are some basic differences mentioned between the two, which will help you choose the best alternative for you.
In car title loans, generally, you borrow a sum of money by giving your car title as collateral to the creditor. But here, you must hold the original copy of the title of the car, i.e. you should be the owner of the car. While with auto equity loans they are for borrowers who are lien holder and are making payments or instalments on them. If you have agreeable equity in the vehicle, you can apply for the loan.
The sum of money you are allowed to borrow is typically somewhere within the 50% of your current loan’s equity. However, a person with bad or no credit history can apply for both the types of loans that suit his situation. Also, in car equity loan as well as car title loans, you can get a loan in a day or two, which makes it apt for emergency purposes like economy crisis, paying medical bills, credit card bills and education fees or for other personal purposes.
The basic requirements for car equity loans are that you are employed and crossed a certain age. Also, you must have a driver license and car insurance and should also show proof of how much more your balance is for your vehicle and details about your payment history. For a car title loan, employment and age is also a considerable factor. Moreover, the car title loans California asks you to show documents of the title of the car; typically the car age should not be more than fifteen years to qualify for the loan.
Condition of your car is also a crucial factor as it is decides how much money you can be offered by the creditor. With car equity loans, you will be allowed to drive your vehicle though even at the same time as you are paying the amount you have loaned. While, the sum of money you can get as loan is higher in case of car title loan.
Both the type of car loans can prove to very beneficial, especially if you want quick cash for a short period of time. One may read the contract carefully, for examples, what actions the creditor can take in case of late payments, how interest rate will vary, etc.
However, when vehicle is at stake, one must act prudently as you can lose your vehicle, so that you have to pay much more than, the loan may have actually cost. It is crucial that your monthly payments are on time. Above all, the most important thing is that the repayment process is smooth for you and the lender also.
Created on Dec 13th 2017 00:33. Viewed 860 times.