Auto titles loans are not as well known as pay day loans, however, for many consumers an auto title loan may be more helpful to them. These two types of loans are fundamentally different. Knowing the differences between these two types of cash loans will help you make the right decision on which type of loan is best for you.

Auto title loans are cash loans given to car owners based on the equity they have in their automobile. Typically you need to own a car that is free and clear of other liens (this means no loans on the car). The loan amount you receive is based on the value of your vehicle.

Depending on who is approving the auto title loans, the value of the car they consider will either be the wholesale value, the private sale value or the retail value. Typically, most companies that offer car title loans base the loan amount on the wholesale value of the car.

Pay day loans are cash loans given to consumers based on the future salary. The loan amounts are typically much lower with many states capping the loan amount at $500. Payday loans are typically paid back on the date of your next scheduled paycheck.

While comparing auto title loans and pay day loans you will want to take note of their payment terms. For example, are the loans paid by weekly, bi-weekly or monthly. What is the amount of the payment and what are the payment options? Many consumers do not focus on these things and find themselves in trouble when the loan is due or become past due.

Whether you are considering auto title loans or pay day loans you will want to make sure the company you are considering is licensed with the Better Business Bureau. You should do a little research on the company and confirm that they are the company you want to get your loan through.

If you are in need of some fast cash you need to make the right decision. Make sure you should compare and contract pay day loans and auto title loans.