Title Loan vs. Car Refinance: What’s the Difference and Which One Is Right for You?

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If you own a car and need quick cash, you might be wondering whether to go for a title loan or refinance your car.

Both are valid options, but they serve different needs. In this article, we break down the differences between the two to help you make a well-informed decision!

What is a title loan?

A title loan allows you to borrow money using your car as collateral—typically for cars that are fully paid off. In some cases, you may also be eligible if you’re still paying off your car and meet certain criteria. You retain ownership and continue driving the car while using the title as security.

What is refinancing?

Refinancing means transferring your current car loan to another lender that offers better terms, such as a lower interest rate, reduced monthly payments, or even a cash-out option. It’s usually ideal for those who have already paid off a portion of their car loan.

Key differences

• Ownership: With a title loan, you typically keep the title (if the car is paid off), whereas refinancing involves transferring your loan to a new lender.
• Loan amount: Title loans usually offer smaller amounts based on current market value, while refinancing can potentially offer higher limits through cash-out options.
• Purpose: Title loans are for fast cash needs, while refinancing is better suited for long-term financial adjustment.

Which one should you choose?

• If your car is fully paid off and you need quick cash: a title loan may be the better option.

• If you're still paying off the car and want better terms or extra funds: refinancing is likely more suitable.

Motorist Thailand is here to help

Motorist Thailand offers free, unbiased financial consultations to help you compare title loans and refinancing offers from Thailand’s top banks. Our goal is to match you with the best financial solution for your needs without any fees or obligations.

Read More:  Complete Guide to Car Loans in Thailand: Best Types, Rates & Approval Tips

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