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If youâre in need of fast access to funds, you may consider taking out a cash advance, or applying for a car title loan to take advantage of the built-up equity in your vehicle. If you are stuck deciding between these two borrowing options, keep reading to better understand how they are different. Armed with that information, you can make the best choice for your financial situation.
What is a Cash Advance?
Cash advance is a term that covers a few different borrowing options. The different types of cash advances include short term borrowing against your credit card, against your future paycheck, but also include short term loans made by cash advance providers based on your credit or verifiable income:
- Credit card cash advances: If you have an active credit card that is not currently maxed out, you may be able to access cash using that credit card. The amount you can access through a credit card cash advance may be as high as the difference between your credit limit and your current card balance, but may also be limited by the terms of your credit card agreement.
- Cash advances against future paycheck: Some employers offer cash advances to their employees through so-called Earned Wage Access (EWA) providers. If your employer is partnered with an EWA provider like DailyPay, you may access the earned portion of your paycheck before your employer processes payroll.Â
- Other cash advances: Small short-term loans that do not require a credit card or future paycheck can also be generically referred to as cash advances. These are essentially small loans that may be primarily based on your income and credit.
Depending on which of these types of cash advances you have in mind, the amount of money you can borrow and the associated costs can vary a lot. For example, credit card cash advance amounts are primarily a function of your current credit limit, and the cost is likely to be a combination of interest and fees that the card issuer charges for this service. Earned Wage Access providers will largely make the maximum amount dependent on the size of your paycheck, and may charge you a fee or ask for tips for providing early access to your paycheck.
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What is a Title Loan?
Unlike the term âcash advanceâ, the term title loan refers to one specific product â a loan that is secured by the borrowerâs vehicle. While title loans have a few synonyms, including pink slip loan, auto equity loan and car collateral loan, they are essentially the same. There are certainly differences between the various title loan providers in terms of the loan requirements, maximum amounts and required documents, but all title loans are loans that require a paid-off or almost paid-off vehicle to be used as collateral.
Comparing Title Loans and Cash Advances
Title loans and cash advances both offer a way to access cash when needed1, but they are quite different in many respects. Here are some of the key ones:
Cash Advance | Title Loan | |
Requirements | Depends on the type of cash advance product: Credit card, payroll or income and credit | Paid-off or nearly paid-off vehicle and income1 |
| Borrowing Cost | Depends on the type of cash advance product: Interest, fees, or âtipsâ | Usually interest and fees |
| Loan Amount | Depends on the available credit limit, size of the paycheck and other credit criteria | Primarily depends on your vehicle and income. Typically several hundred to several thousand dollars1 |
Should You Get a Title Loan or Cash Advance?
Whether a cash advance or a car title loan is best for your current situation is an important financial decision. There are both pros and cons to getting a cash advance and a title loan.
With credit card cash advances, a big pro is that you can get funds quickly and you donât even need to apply if you have an active credit card with available credit. Many times, when you get a cash advance through your credit card issuer, you can simply get the money from an ATM just like you would if you were taking the money out of your own checking account.
If your employer is partnered and integrated with an Earned Wage Access provider, the EWA borrowing option can also be quite convenient. While itâs always important to check the details for your specific options, EWAs have been reported to be competitively priced, especially when compared to payday loans.
Title loans serviced by LoanMart can come with several beneficial features. They include fast access to funds, flexible approval terms, affordable monthly payments and no balloon payments or pre-payment penalties.1 Furthermore, no matter if youâre applying for a title loan in Arkansas, South Carolina, Utah or one of the other more than 20 states that are serviced by LoanMart, you can expect competent and compassionate loan officers throughout the duration of the loan.1
Be Empowered with an Auto Title Loan serviced by LoanMart
If a title loan sounds like a better option than a cash advance for you, here are some of the ways an auto title loan serviced by LoanMart may empower you:1
- Keep your car and drive it like normal while you make your monthly payments.
- Spend your money how you like â you wonât have to disclose exactly how you use your money.
- Extended repayment terms, so paying back your auto title loan can be stress-free and manageable.3
 Apply today for a car title loan serviced by LoanMart, and receive a loan quote without obligation!
