If you are looking to get some quick money for an emergency, then you have a few choices. Ideally, you’ll have a rainy day fund to draw from, or friends or family to lend you money. If not, you may need to borrow money in order to pay for this emergency. If that is the case, you might want to consider a payday loan, or title loan. Neither of these choices is particularly cheap. They should be used only when necessary. A title loan offers you the same fast funding as a payday loan, but tend to be somewhat cheaper. However, the trade-off is that you are putting up your vehicle as collateral for the loan. In other words, in the event that you aren’t able to make your payments, you lose your car. We will discuss some additional details of this loan type in today’s article.

First, let’s talk about backing a loan with a car. In order to do this, you must have complete ownership of your vehicle. This means two things; first, that you do not owe any money on the vehicle to the bank, and second, that you have physical possession of the title.

The reason for complete ownership, often referred to as “a clean title,” is simple. If somebody else is owed money on your car, they have a stake in what happens to it. As that lender has not agreed to your new arrangement, they cannot be held liable in the event of nonpayment. In other words, the title loan lender has no recourse if you don’t pay them the money that you owe. As for having possession of the title itself, this is just to prove that you own the vehicle.

Now, on to the subject of interest rates and what makes a title loan cheaper than a payday loan. The main driving force behind the lower rate is that the loan is backed by something physical, and not just your personal guarantee. You should keep this in perspective, though. Lower than a payday loan does not necessarily mean low. In fact, pretty much all fast funding solutions have much higher than average interest rates.

As I stated earlier, consider this for emergency purposes only. Also remember, if you aren’t able to make your payments, they have the right to take your car. This would most likely leave you in worse circumstances than you were to begin with.

Make sure to read the fine print to see how much fault tolerance your particular lender has for nonpayment.

For more information, go to Title Loans at http://www.creditnowusa.com/