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Why Payday Loans Are Better Than Title Loans

Short term loans are common nowadays. Many Americans apply for a short term loan either at their local check cashing store or online. Some of these short term loans are called title loans while the other ones are called payday loans also referred to as paycheck advance loans.

For title loans borrower provides their car title as collateral for a loan. If borrower pays back the loan online including all the fees and interest rates, then they are good. However if they default and fail to work with lender on any sort of payment plan, then lose their car as it can be repossessed by the lender.
writes an article on why car title loans are a bad idea.

Personal Payday Loans as alternative

Taking a personal payday loan is less risky. The collateral you have is to lose your credit if you default. Many collections agencies threaten to take actions but most they can do is do wage garnishment which is far less risky than losing your car. Also many States prohibit wage garnishment so the worse you can do if you default is to get your credit history damaged and continue collection calls.

Now this doesn’t mean that you, as a potential borrower, can get away taking a payday loan and never pay it back but it is to inform and educate you.
So for that reason payday loans are better than payday loans because they are less riskier.