Everyone eventually has to deal with emergency expenses, which is why it’s vital to keep your savings with the right amount just in case. Nevertheless, property damage from natural disasters or sudden hospitalization can quickly drain your finances. These issues can vary in severity and put you in a compromised financial position. Thankfully, you can get immediate loan options through installment and title loans.
Dealing with Sudden Expenses
Sudden expenses can come up in life with no warning. This is usually the case for people with compromising medical conditions or people living near harsh geographic locations. Whether it’s a genetic medical condition or sudden environmental calamity, these financial burdens will require a steep price to pay.
Unfortunately, you need to qualify for specific credit score requirements for most loans. This already makes people unwilling to apply for a loan and risk the long period of waiting just to get denied. Thankfully, some loans aren’t as strict with requiring borrowers with strict documents and approval prerequisites.
Explaining Title Loans
Title loans are based on the borrower’s ability to provide collateral for their loan, which dictates the potential loan amount based on 25 percent of the asset’s value. This is why the borrower must own something with a considerably high cost, which is usually a car or small property.
The loan company is obligated to take ownership of the collateral if the borrower cannot meet repayment deadlines. While this can be a risky obligation, borrowers prefer it for two reasons. First, the loan only lasts for 30 days or less, making it easier to pay the debt for emergencies. Additionally, the borrower maintains ownership of the asset throughout the loan’s duration.
However, its two benefits can also be a disadvantage for some people. For example, the tight deadline might not be enough to get funding for repayment. While it prevents the borrower from experiencing compounding interest rates, the short time frame for repayment may lead to the loss of assets or property.
Explaining Installment loans
Installment loans are great for emergencies since it doesn’t have a credit check. For this reason, you don’t need a high credit score to gain favorable interest rates. Additionally, you have the freedom to set your repayment time frame and the schedule for each payment. This lets you choose the best time to meet your deadlines without the risk of missing your repayment dates.
Ideally, an installment loan is relatively short, but people can extend the term to a few months to over 30 years. While it doesn’t require collateral as an unsecured loan, some installment loans can be supplemented with collateral. You’ll need to confirm with your lending company if they allow one or the other as a payment agreement.
The better option between the two loans will depend on your situation. Ideally, it’s better to go with a title loan if you want to avoid high insurance costs by paying the loan sooner. However, the drawback is that you’ll exchange something of considerable value like a car to get it off your record. For this reason, many borrowers choose to go for an installment loan instead.
While installment loans have a more flexible payment plan, you still need to look for the right lending company. Since there are numerous options in the market, you should choose the right company that matches your needs and recognizes your financial limitations.
Our team at Shelby Finance Company wants our customers to have a simplified application process with 3 convenient options to choose from. This lets us give a tailor fit financing solution to meet your needs. If you're looking for installment loans from Memphis, TN, you're in the right place.