There are good ways to borrow cash and risky ways to borrow cash. Of course the ideal and cheapest way to borrow money is to take out a loan from a bank or credit union. A credit card loan will work, but such borrowing comes with a higher interest rate. If you are poor or lack sufficient credit, you may be stuck with payday loans or car title loans. Car title loans are similar to payday loans in cost, but include extra risk. The most costly method of no-collateral loan would be a cash advance loan, but rates of interest can easily run into the 300-1000% range for a 14 day loan. If you are financially secure, you can likely borrow from credit unions or credit card accounts.

Vehicle title loans are risky -An car title loan works much like a cash advance, except the cash is secured by the title to the borrower's car. If the title loan isn't repaid, the lender may repossess the vehicle and in many, if not most states, they may sell it to recover their loan amount. In some states, such as Georgia, the title lender may even keep all of the money, no matter the amount. Title loans tend to last a bit longer than payday loans; thirty days is the most common term.

Cash advance loans are not backed up with collateral -Payday loans are quite expensive; rates for a $15/$100 fee run 391% a year. For a payday loan, the individual takes out a small loan in the amount of one hundred to five hundred dollars and pays a fee that ranges from fifteen to thirty dollars per $100 borrowed. A payday loan is a short-term loan of fourteen days' duration. A cash advance loan is renewable; it may be renewed, or rolled over, for an extra two weeks if the consumer pays the fee once more. Cash advance loans are financed with a postdated personal check for the loan amount plus the fee. Cash advance loans are unsecured, which businesses say justifies the high charges.

The individual not only has to fork over high interest payments, but he or she is also chancing losing their car if they don't pay on time, and that occurs pretty often. Despite the fact that auto title financing presents less risk to the business, they usually have interest rates that are typically 300-400% a year. Given that these products are backed by collateral, one might imagine that they would be less expensive.

Consumers who are considering applying for car title financing should exercise caution. While both title loans and quick cash advances provide short-term cash to those who need it at high rates, title loans carry extra risk to the customer. It is one thing to borrow cash at an insane rates that contrasts well to borrowing from a loan shark, but it is something else again to take the risk of giving up your transportation if you cannot repay.