Cash Advance Title Loans: What You Need To Know

Cash advances and title loans are both ways to borrow money, but they have distinct differences. Cash advances are usually offered by credit card issuers, and you need a credit card or open credit line to qualify. They are a quick and convenient way to get cash, but they can come with high-interest rates and fees. Title loans, on the other hand, use your vehicle's title as collateral and are an option for those with poor credit or no credit history. While title loans can provide fast access to cash, they are typically very expensive and may be difficult to repay.

Pros and cons of cash advances

Cash advances are a type of short-term loan that can be used to cover unexpected costs or emergencies. They are easy to obtain and provide fast access to cash, but they typically come with high-interest rates and fees.

Pros of Cash Advances

• No application or credit check is required for cash advances, making them easily accessible.
• Cash advances offer quick access to cash, which is useful in emergencies.
• There is less paperwork involved in applying for a cash advance compared to traditional loans.
• Credit is not the primary factor for approval, and you may be eligible even with a less-than-ideal credit history.

Cons of Cash Advances

• Cash advances can be expensive due to high-interest rates and fees, which can be as high as 100% or more of the borrowed amount.
• The loans are incredibly short-term, requiring quick repayment, often within two weeks, to avoid substantial penalties and even higher-interest rates.
• Interest accrues from the moment the funds are received, and the longer it takes to repay, the more money is charged overall.
• The convenience of a cash advance comes at a price, with various fees involved, including borrowing fees, ATM fees, and cash advance fees.
• Relying heavily on cash advances may indicate deeper financial issues that need to be addressed.

While cash advances can provide quick funding, it is important to carefully consider the potential downsides and explore alternative options, such as borrowing from friends or family or seeking assistance from a credit counseling agency.

Pros and cons of title loans

Pros of Title Loans:

• Quick access to cash: Title loans offer fast funding, often within 24 hours, making them suitable for borrowers facing emergency expenses.
• No credit check: Title loans do not depend on the borrower's credit score or history, allowing those with bad credit to access funds without worrying about their credit scores.
• Lower interest rates: Title loans generally have lower interest rates compared to other short-term loans, resulting in a lower total amount owed at the end of the loan term.

Cons of Title Loans:

• Risk of repossession: Since the loan is secured against the borrower's vehicle, there is a risk of repossession if timely payments are not made. The lender can take possession of the vehicle and sell it to offset the defaulted loan.
• High-interest rates and fees: Title loans often come with higher-than-average interest rates and additional fees, such as processing and administrative charges, which can add up quickly if the loan is not paid off promptly.
• Rigid terms and conditions: Title loans typically have strict terms and conditions, and borrowers should carefully understand the fees, interest rates, and repayment terms before taking out the loan.
• Potential for remaining debt: If the sale of the repossessed vehicle does not cover the loan balance, the borrower may still owe money to the lender, even after losing their car.

How to get a cash advance

A cash advance is a short-term loan that can be useful for covering unexpected expenses or emergencies. They are often acquired through credit card companies, payday lenders, or cash advance stores.

To be eligible for a cash advance, you must have an active credit card with available credit. You may also need to meet other requirements, such as having a certain credit score or income level.

• ATM: You can use your physical card and the personal identification number (PIN) provided by your card issuer to get a cash advance from an ATM. You may also be subject to daily ATM withdrawal limits and fees.
• Bank or credit union: Visit a bank or credit union teller to get a cash advance from your credit card account. You will need your credit card and a photo ID to withdraw the funds.
• Convenience check: You may be able to request convenience checks from your credit card company. You can use a convenience check like a regular check, and once it clears, the amount is deducted from your credit limit.
• Online transfer: You can log in to your credit card account and request an online transfer, which typically gets deposited into your checking account within a few days.
• In-person: You may be able to use your card to take out a cash advance in person at a branch. Remember to take identification with you.

Downsides of Cash Advances

While cash advances can be a quick and convenient way to get cash, they usually have higher interest rates and fees than traditional loans or purchases. They can become expensive if not repaid promptly and may impact your credit score. It is important to carefully read the terms and conditions and consider alternative options before taking out a cash advance.

How to get a title loan

• Contact a lender: You can apply for a title loan online, by phone, or in person. Lenders such as Max Cash, Chicago Title Loans Now, and TitleMax are some of the options to consider.
• Provide basic information: You will need to share details about your desired loan amount, vehicle, and income to meet the title loan requirements.
• Await pre-approval: A loan agent will get in touch to discuss qualifications and pre-approval. They may request additional information or documents, such as proof of insurance, residency, and vehicle details.
• Finalize the loan: Upon approval, you can receive your funds in as little as 30 minutes or within a day or two, depending on the lender.

It is important to note that title loans typically have high-interest rates, and it is crucial to carefully review the terms and conditions before committing to any loan. Additionally, be aware of potential fees and charges associated with title loans, as these can add up over time.

Alternatives to cash advances and title loans

Cash advances and title loans are both ways to borrow money, but they are not the only options available. Here are some alternatives to consider:

Alternatives to Cash Advances

Cash advances can be a quick and convenient way to get cash, especially if you need to cover unexpected expenses or emergencies. However, they often come with high-interest rates and fees, which can become expensive if not repaid promptly. Here are some alternatives to consider:

• Buy-Now-Pay-Later (BNPL) Services: BNPL services allow you to make a necessary purchase and spread out the payments over time. While some options may charge interest or fees, they can still be a more affordable alternative to cash advances.
• Traditional Bank Loans: Even if you have credit problems, traditional bank loans are typically cheaper than cash advances. Some banks offer collateral loans to borrowers with less-than-perfect credit, allowing employed individuals to pledge their vehicles at bank-level interest rates.
• Borrow from Friends or Family: Borrowing money from people you know personally can help you avoid the high-interest rates and fees associated with cash advances.
• Non-Profit Credit Counselling: Seeking assistance from a non-profit credit counselling agency can help you explore alternative options and improve your financial situation without taking on additional debt.

Alternatives to Title Loans

• Personal Loans: Personal loans from banks or credit unions can offer lower interest rates and more flexible repayment terms than title loans.
• Peer-to-Peer Loans: Peer-to-peer lending platforms allow you to borrow money directly from individuals, potentially offering more favourable terms than title loans.
• Charitable Donations: Depending on your situation, you may be eligible for financial assistance from charitable organizations.
• Other Collateral: If you have assets other than your vehicle, you may be able to secure a loan against those assets at a lower interest rate than a title loan.

Frequently asked questions