Overview of Auto Title and Payday Loans in Sacramento, CA
The aftermath of the global economic crisis brought financial uncertainty to California and the rest of the US. Unfortunately, it’s not uncommon for Californians to find themselves in need of quick cash to pay their rent or monthly bills. In Sacramento, fast auto and payday loans have become a preferred choice for many to regain financial stability.
To avoid the pitfalls of handling payday and title loans improperly and avert an even more serious financial crisis, read through the detailed overview and comparison of these two popular types of loans.
Emergency loans in Sacramento
Before we delve into the specifics of each loan type, it’s necessary to point out that payday and title loans aren’t typically devised as long-term loans. Unlike personal loans, which include long-term loans with lower interest rates, auto and payday loans are typically short-term.
What’s more, unlike traditional bank loans, it’s relatively easy to obtain fast payday and title loans. For example, you can obtain an auto title loan in as little as 30 minutes! Also, borrowers don’t even have to have a good credit score; in most cases, you can obtain either a payday loan or title loan in Sacramento with no credit history at all.
For all these reasons, Sacramento title and payday loans are often seen as emergency loans for people who are in immediate need of cash to pay for certain expenses.
Secured vs. unsecured loans
All loans, payday and title loans included, fall into one of two loan categories: secured and unsecured loans. To obtain a secured loan, a borrower needs to have an asset to serve as collateral, i.e. an asset that could be repossessed by the lender in case the borrower is unable to repay the loan within the agreed repayment period.
On the other hand, unsecured loans have no collateral a lender could seize from the borrower in case of failed or late repayment. However, a borrower has to present a proof of income as a form of guarantee they would be able to pay the loan back.
How do payday loans work in Sacramento?
Payday loans are unsecured loans and don’t have collateral. Similarly to other parts of California, Sacramento payday loans are mostly for people who need cash fast and plan to pay it back within a short period of time. In addition to being short-term, payday loans are also typically small-cash loans.
To obtain a payday loan, a borrower doesn’t need to have any credit history. They can obtain a payday loan even if their credit score is bad, provided they present a proof of income, such as the pay stub.
A borrower has to write a postdated personal check to the lender in exchange for the payday loan. The date stated on the check is usually the next payday, which is how the loan got its name. The repayment period is typically 14 days; the borrower has to pay the financial fee in addition to the loan amount. The overall amount that will have to be repaid has to be clearly stated on the postdated check.
The borrower will either pay the amount in cash or the lender will deposit the check. If the borrower fails to repay the amount stated on the check, they can apply for a loan extension. In that case, they will have to write another postdated check stating the new loan amount and an extra fee to the lender.
How do Sacramento auto title loans work?
Auto title loans are also popularly called car title loans or title loans. They are secured loans and use the borrower’s vehicle (the car) as collateral. More specifically, the car title serves as collateral. To obtain the loan, a borrower first takes their car to the lender for appraisal. Once the value of the car is determined, the lender offers a percentage of the value as the loan amount. The loan amount can vary from lender to lender, with some lenders offering significantly higher or lower percentages of the car’s value.
The borrower obtains the loan in exchange for their car title. There is typically the minimum repayment period (up to 30 days), within which the borrower has to pay the loan back. If they fail to do so, the lender can seize their car.
As with payday loans, auto title loans can be extended so that the borrower can keep their car even if they fail to repay the loan. However, the extension means that they have to apply for another loan and pay additional fees.
Payday loans vs. auto title loans
Although both payday and auto title loans involve relatively high interest rates, title loans are a better option in this respect. What many see as the biggest downside of payday loans is the interest rate of approximately 400% APR. Title loans carry an interest rate of 300% APR on average, which is slightly lower. However, auto title loans enable borrowers to obtain higher loans than they would with payday loans.
What’s more, some payday loan lenders collect late payments very aggressively, which is why many borrowers from Sacramento prefer auto title loans.
Besides, in case a borrower cannot pay back the title loan, the only thing they will lose is their car. Although a valuable possession, many people feel it’s safer to lose a car than to be stuck in the vicious payday loan circle and sink into greater debt with each loan extension.
Custom Auto Title Loans in Sacramento
A significant number of Sacramento residents managed to resolve immediate financial difficulties with auto title loans. Still, there are lenders who wish to make the loans even more accessible and effective for their customers. With 15 years of dedication to customers with financial struggles, Fast Money Loan created the Diamond Express Title Loan Program for exactly that reason.
There are many advantages to Diamond Title Loans. Firstly, the customers get to keep their car during the whole of the repayment period. Also, there is no minimum repayment period and loans are structured as long-term loans with a 36-month repayment period. Nevertheless, a customer can repay the loan at any time within that period of time – with no pre-payment penalty!
One of the greatest advantages of Diamond Loans is the lower-than-average interest rate. With the average interest rate for title loans being 25%, Fast Money Loan offers APR as low as 18.59% for all customers who qualify for the loan. What’s more, Fast Money Loan guarantees loan amounts of up to 100% of the Manheim value of the car! Also, the customers don’t have to go through credit checks.
Get a Diamond Auto Title Loan in 15 minutes today! Solve your financial problems with a reliable partner like Fast Money Loan. We are here for you!