Here are some of the main differences between title loans and installment loans.
For a title loan, the collateral for the loan is the customer’s vehicle. Title loans do not require credit and are based off the cars value. A title loan is a secured loan meaning, the borrower is asked to use an asset as collateral.
An installment loan is unsecured and does not require collateral. Many companies go based off credit for installment loans, however, here at Check N Title we go based off the customer’s monthly income. A customer’s credit may be impacted by an installment loan since companies can report to the Credit Bureau default loans.
For a title loan, customers would need a Texas Title, which must be under their name, a car, and an ID. On the other hand, for an installment loan you would need a Texas ID, a checking account, and a Social Security Number. The interest rates and fees for title loans are lower than those of an installment loan. Generally, customers are approved for larger amounts on title loans.