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Car Title Loans vs. Registration Loans | Registration vs. Title
If you’re in need of temporary financial relief, car title loans and registration loans are two options to consider. While a car title loan uses the title of your vehicle as collateral, a registration loan does not. Let’s take a closer look at car title loans and registration loans so you can choose the right type of loan for your situation.
What is a car title loan?
A car title loan is a secured loan that uses your car as collateral. To take one out, most lenders require that you own your car. After you get approved for a car title loan, you’ll give the lender your car title in exchange for a lump sum of cash. The amount you receive is typically based on the value of your car. You will be able to drive your car as long as you repay your car title loan on time.
Pros and cons of car title loans
Car title loans come with benefits and drawbacks, including:
Pros of car title loans
- Larger loan amount: Since you’re using your car as collateral and must own your car outright, you may receive more money from a car title loan than you would with a registration loan.
- Lower interest rates: Car title loans often have lower interest rates than registration loans.
Cons of car title loans
- You have to have a clean car title: Borrowers must own their car outright to qualify for a car title loan, and there must be no liens on the car.
- You could lose your vehicle: If you don’t repay a car title loan, the lender can repossess your car to recoup the loss.
What is a vehicle registration loan?
With a registration loan, you use your vehicle’s registration to borrow money. Lenders may approve you for a registration loan even if you don’t own your car outright. The amount you receive will be based on your income and the most recent value of your car. Upon approval, you can continue to drive your vehicle and pay off your vehicle registration loan according to the agreed upon loan terms.
Pros and cons of registration loans
There are several pros and cons of registration loans, including:
Pros of registration loans
- You don’t have to own your car: Borrowers can qualify for a registration loan without having to own a car outright.
- No repossession risk: Unlike with title loans, the lender can’t repossess your vehicle if you default on a registration loan.
Cons of registration loans
- Higher interest rates: Since you’re not providing your car title as collateral, registration loan interest rates tend to be higher.
- Smaller loan amount: Registration loans typically have lower borrowing limits than title loans.
Car title vs. registration
A car title is a document that establishes you as the owner of your vehicle. Titles will typically include information like your car’s model, make, and year. A car registration is documentation that shows you’ve registered your car in your state and have paid any necessary taxes and fees. Unlike titles, which only have to be changed if the owner of your car changes or if you paid off a car loan, registrations need to be renewed regularly.
Differences between car title loans and vehicle registration loans
There are some noteworthy differences between car title loans and vehicle registration loans including:
Car title loans are for vehicle owners
To take out a car title loan, you must own a paid off vehicle. If you still owe money on your car or don’t own one at all, this loan option is not available to you.
Car title loans allow you to take out a larger loan amount
Compared to auto registration loans, car title loans generally offer larger borrowing limits. You may get approved for anywhere between 25% to 50% of the value of your car.
Vehicle registration loans can come with higher interest rates
Since you don’t have to use your car as collateral, registration loans are more risky to lenders than car title loans. This higher risk leads to higher registration loan interest rates that can cost you hundreds or even thousands of extra dollars.
Similarities between car title loans and registration loans
Some of the most significant similarities between car title loans and registration loans are as follows:
You don’t need great credit to get approved
If you don’t have the best credit score, no worries. Both title and registration loans have lenient credit requirements. Your chances of approval these loans are high, even with fair or bad credit.
You can pay off your car title or registration loan early without facing penalties
You may receive some unexpected cash such as birthday money or a bonus at work. If you put this money toward your car title or registration loan and pay it off early, you won’t get penalized.
You may be able to apply for a car title or registration loan online
Some lenders that offer car title loans and registration loans have an online application process. You can apply (and get approved) for both of these loans from the comfort of your own home.
Should I get a car title loan or registration loan?
If your goal is to take out a larger loan, a car title loan may be a great option and they generally have lower interest rates than registration loans. On the contrary, if you don’t own your car and are only looking to borrow a bit of money, a registration loan may be a better option. Before you make a decision, consider your car ownership status as well as how much money you need. This can help you decide whether a title loan or registration loan is right for you.
What you’ll need to apply for a car title loan
Here’s what you’ll need to apply for an Advance America car title loan:
- Government issued ID
- Your car and title
- Proof of residence
- Proof of income, vehicle registration, and insurance may be required in some states
How to apply for an Advance America car title loan
It’s easy to apply for an Advance America car title loan. Take the following steps to get quick funds:
1. Drive your car to an Advance America location near you. Make sure to bring your car title and identification. Some states may require you to provide proof of residency, proof of income, and vehicle insurance.
2. Allow an Advance America employee to appraise your car and determine its value.
3. Once your car has been inspected and if you’ve been approved for a car title loan, fill out and sign your paperwork.
4. Receive your car title loan and leave our location in your vehicle with cash in hand.
Benefits of Advance America car title loans
Here are some benefits of getting a car title loan from Advance America:
Easy application
You can complete a car title loan application in just a few minutes, in person or online from the comfort of home. Then, you can bring your vehicle to a nearby Advance America location, where a store employee will appraise it to determine its value.
Same-day funds
If approved for an Advance America car title loan, you’ll receive the funds you need instantly. Then, you can keep driving your car as you repay the loan.
Good credit not needed
Advance America approves borrowers with all types of credit scores. We’ll consider other factors along with your credit score, like your car’s value and your current debts, so you may still get approved for a car title loan with poor or fair credit.
Get a car title loan today
Advance America offers title loans that could allow you to receive your funds the same day you apply. All you have to do is stop by an Advance America location to fill out an application and get your vehicle appraised. Your loan amount will be based on your car’s value and you’ll be able to drive your vehicle as long as you repay your car title loan on time.
