Financial institutions anywhere in the world are definitely true to their billings as the providers of loans to those who are in need of loans. There are however two types of loans: secured loans and unsecured loans. Secured loans are guaranteed loans, meaning they are loans that require the borrowers to provide collateral or guaranteed repayment. Secured loans are usually provided in larger amounts because they are secured and they also come with lower interest rates. Mortgage is a good example of a secured loan, and if you are in Vancouver, B.C., for example, car title loans vancouver are some of the good examples of secured loans. If you are living in Vancouver, British Columbia, and you badly needed money, you can readily avail of car title loans BC or vehicle title loans Vancouver even if you have a bad credit ratings, because car title loans are secured loans. On the other hand, other loans are not secured against something. Examples of this type of loans include personal loans, payday loans, auto loans, and credit card loans. This type of loans is usually provided in smaller amount and comes with higher interest rates.
The Difference between Auto Loans and Car Title Loans
Some people confuse car title loans with car loans, simply because both types of loans have the term “car” appended to each of these types of loans. To clarify the usual confusion associated with these loans, one should understand that car loans are given out to those who would like to buy a car. Hence, it is the financial assistance afforded those who would like to raise funding for the purchase of their own cars. On the other hand, car title loans are loans that you could avail of using your own car as your collateral for securing the loans. Car or auto loans are often not secured. Car title loans, on the other hand, are secured loans. Car loans likewise are easy to access and there are very few requirements for this type of loans, unlike in car loans wherein there are several conditions appended to the loans before you can qualify for them. Some of these conditions include having a high credit score and a list of guarantors. Car loans likewise come with few restrictions. You often simply have to comply with the minimal requirements, and you simply have to own the car, and have the car title with you to present to the lender. Moreover, there is not much paperwork involved in this type of loans.
The concomitant advantages of car title loans over other types of non-secured loans include swift and fast cash access, for the processing of car title loans seldom go beyond a single day. Second, you don’t need to have high credit ratings to qualify for this type of loans. Hence, even if you have a failing credit score, you can still avail of a car title loan. Moreover, you can still drive your car while you got an existing car title loan. Lastly, car title loans have lower interest rates, and for this reason, the car title loan is definitely your perfect option during a financial crisis.