There are all popular style loans that have quite a few similarities, but are still very individual and different in their reasons for having the loans in place. The following are some points that will shed some light of the three different types named:

 

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Car title loans – these are supposedly the loans that require the least amount of background check and usually are quite easy to acquire.

 

The loans are given out based on the lesser amount of the title of the paid vehicle. Meaning, the loan amount given would probably be only 60% or 70% at best of the actual value of the vehicle at the time.

 

The interest charged is also usually quite high and the repayment period is significantly short. All in all this type of loan is usually taken out only in very desperate circumstances or where funds needed are small, and getting an actual loan from the banks would not be feasible or easy.

 

Payday loans – this is also another very costly type of loan as the required interest’s changes are comparatively high. Basically the borrower will write a cheque or a legal promissory note in the amount borrowed with the agreed interest added on, and this is to be held by the lender until the agreed date where the documents are used to cash in the amounts stated.

 

This is a quick and seemingly easy way of acquiring cash when needed, however the interests charged are often the reasons why people eventually get caught in a vicious cycle of never ending borrowing scenarios.

 

High interest loans – these are usually loans that are given to individuals that have a hard time securing loans through the better channels of loan acquirement.

 

Because of the design of these loans, which can be rather intimidating, it is usually sought by individuals who may already have very poor credit ratings. This will cause the lender to secure the payments, any way possible, thus the high interests charged.

 

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