Car Title Loans vs Payday Loans

Payday Loans

The payday loan industry has been around in Canada ever since the 1980s. They existed to help individuals or families with low-income with some short term cash to carry them over to the next payday. However, the payday loan industry has come under scrutiny lately for its absurdly high interest rate they charge their clients. Therefore, we think payday loan companies are setting up their customers for financial failure.

The main disadvantage of getting a payday loan is that it will cost you a large amount of money for the loan. The following table was taken from the Ontario Provincial website regarding payday loan fees.

If you borrow $300 for 2 weeks: Payday Loan Fee
1 loan will cost $63
2 loans will cost $126
4 loans will cost $252
6 loans will cost $378

The interest rate charged by payday loan companies over a 1-year period is 504%!! If you cannot pay back the payday loan, then you’re going to be in serious financial trouble such as declare bankruptcy or never able to take a loan again from the same company.


Car Title Loans

Car title loans are loans where you borrow against the value of your vehicle. You need to own the car outright in order to qualify for a car title loan. This is a much better option than a payday loan because you can receive more money than a payday loan, lower interest rates, and a longer loan term. Car title loans are secured loans, whereas payday loans are unsecured loans. That’s why the terms of an auto title loan are more favourable than payday loans.

Why C.A.I. Financial stands out from all the car title loan companies.

At C.A.I. Financial Hamilton, we have an innovative program called the Reciprocal Lending Program. For us, similar to a title loan, we would give you the funds and bind it with some type of collateral in our contracts. Unlike the car title loans, we do not take the title of your vehicle or collateral. This gives our customers an extra layer of security and comfort knowing that the title on their vehicle is in their name.

In addition, we do not install any GPS units on our customer’s cars. We want to develop a trusting relationship with all of our clients and the best way to do that is to be honest and have full transparency upfront regarding our services.

no GPS

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