At Utah Money Center, your first stop for cheap cash loans, we’re proud to provide a few different options for people in a tough situation who need a little quick cash. Two of our primary options: Title loans and signature loans, each of which have their specific qualities and benefits depending on the financial situation you happen to be in.
How do these loan types differ, and which might be best for you? There are a few different factors involved here Let’s take a look.
Secured Vs Unsecured
In the loan world, there are two broad types: Secured and unsecured. Secured loans are the kind that are protected by collateral – an item or asset of value that you put up to protect the lender’s investment in cases where you aren’t able to properly repay the loan based on the terms and conditions you and he lender agreed to.
An unsecured loan, on the other hand, has no collateral involved at all. This generally means that lenders will have to take higher interest rates to account for the additional risk they’re taking. This kind of basic trade-off is present throughout the loan world in one form or another.
Signature Loan
A signature loan is an unsecured loan, as it does not require any collateral. These are generally for smaller amounts than title loans, and interest rates will generally be higher since the lender has no collateral to fall back on in case of a default.
For signature loans, a lender may check your credit score and your payment history, and may require proof of sufficient income to repay the loan. A cosigner might also be required, but generally this person would only be called in during a case of default. If anyone asks you to be a cosigner for their signature loan, just be aware of your basic responsibilities.
Title Loan
A title loan, on the other hand, is a secured loan – your vehicle becomes the collateral that’s used. Because this safety measure is in place for the lender, interest rates and a requirement of your credit score will often be far more flexible. A title loan can range up to $10,000 in some cases, and will vary depending on the funds you need and the value of your car.
For more on the differences between these types of loans, or to inquire about an affordable signature loan or title loan, speak to the experts at Utah Money Center today.