Things to Know Before Opting for a Title Loan
A title loan is simply defined as money lent in return for temporary property holding. The borrower signs a temporary deal of giving the hard copy of the property to the lender in return for a percentage of money. The term period of the loan may not exceed more than that of thirty days. The title loans are more commonly pledged on cars’ titles. The major difference between personal loans and title loans is that personal loans require your bank statement and title loan requires documents on your vehicle and the existence of the car’s title with the borrower. Difference between auto loan and title loan Auto and title loan both use the same entity – vehicle, but the approach of money lending is different. Let us look at the difference between these closely resembling loans. An auto loan is used to purchase a vehicle. The amount is given based on the value of the car to be purchased. The vehicle to be purchased is taken as a pledge. A person opts for auto loans when they are short on cash or funds to purchase the car with it. They would have to visit banks or other financial institutions, where the bank would scrutinize their records before allowing for the loan.