6 Reasons To Borrow Money From a Pawn Shop
With the economy quickly changing and prices increasing every day, more people find they need extra cash to get them through until the next payday or for an unexpected emergency. Pawn shop loans may be the answer.
Pawn shops are an alternative loan service for people, and there are six perks for choosing to work with a pawn shop for a personal loan.
Pawn Shops Don’t Require An Application
Walking into a bank or another traditional financial institution, you go up to a teller and ask for a conventional loan. You sit with a loan officer, and you need to fill out a pile of forms and provide all of your financial information. Your privacy goes out the window, and you need to get the information on the application so the officer can inform you it will take several business days to get the loan processed and approved.
A pawn shop doesn’t have an application for a personal collateral loan. They don’t gather information about your credit history, employment records, bank account information, assets, payment history, debt to income ratio, or any other information. They need a personal asset with the value of the loan amount you need and a state-issued ID. There is no wait-and-see. Your item goes through an appraisal process, and you leave with cash immediately.
There is no waiting period to approve the loan.
Pawn Shops Don’t Do Credit Checks
When you walked into the bank or other financial institution that offers a conventional loan to customers who qualify, part of the process is a credit check. They run your name and social security number through the different credit bureaus gathering credit checks and scores. Suppose you have a low credit score due to debt collectors, too many credit inquiries, or a sizeable principal loan amount on various accounts. In that case, your credit score will be affected, and your credit rating may not be enough to get the loan amount requested.
Pawn shops don’t run credit checks. The loan amounts given are based on what you request and the assessed value of the items you brought with you to use as collateral until you pay back the loan.
Pawn Shops Don’t Report to the Credit Bureaus
Installment loans that don’t receive on-time payments will not only affect your credit score but will also affect your overall credit. Late payments are reported to the credit bureaus, and due dates are set in stone and may have a short grace period; your credit score takes a hit if you don’t make the payment on time.
Pawn shops don’t report to the credit bureaus. The credit bureaus don’t know you borrowed money at a pawn shop, missed a payment, or decided to relinquish your item to pay back the loan in full.
This is because your personal loan is secured by the collateral you gave to the pawn shop to secure the loan.
Pawn Shops are Safe
There are alternative financing options, but they may cost you more in the long run. Payday loans create an ongoing vicious cycle that traps borrowers into living from payday to payday. Payday loans that advance money are not regulated, so they have exorbitant interest rates.
Personal loans negotiated with friends, family, or employers risk destroying personal relationships if the loan isn’t paid back or on-time payments aren’t received as agreed on.
Pawn shops have to meet stringent state law and federal law requirements. They charge fair interest rates and are designed to be short-term, so the interest rates don’t add up over a long time.
Pawn Shops Offer a Confidential Process
No information is gathered for pawnshop loans like employment history and the value of your house. The collateral provided is what is used to secure the loan. Because of this, taxes, liens, reporting, or other publicly available information won’t know about the pawnshop loan.
Pawn Shops Are A Part Of Their Community
Banks, Credit Unions, Credit Karma, Lending Tree, payday alternative loan shops, payday advance centers, online lenders, and other traditional financial institutions are typically a part of bigger businesses and chains. They set a date to repay the loan. The annual interest rate is established when you sign the paperwork, and it is what it is.
Pawn brokers will work with their customers to offer flexible interest rates and loan terms. In some situations, they will extend loans if something comes up if the interest is paid.
According to the National Pawnbrokers Association, the average pawnshop loan is $150, and the average amount is typically paid back within thirty days. Pawn brokers will work with customers and consider adjusting due date options, loan term options, and interest rates to support their clients.
Pawn brokers will work with their customers to help them take control of their finances, compare loans, and suggest the best way to borrow money and not get in over your head.
If you are trying to build credit, you may want to look at your assets stored in your garage, cabinets, closets, and jewelry boxes and talk with a pawn broker about how liquidating the valuable items could help you meet this goal.
Personal Loans From A Pawn Shop is Easy
Fast cash is yours from a pawn shop by following these steps:
- Find and bring in your state-issued ID
- Select a valuable personal item (s) you want to use to secure the loan and bring it to the pawn shop. Make sure that you don’t have a huge sentimental attachment to the item in the instance that you risk losing it.
- Be prepared to have the pawn broker appraise your item and offer a monetary value. The value is based on a fair market price.
- Work with the pawnbroker and go over each loan term. Ensure you understand how to pay off the loan, any additional fees, interest rates, and insurance and storage charges.
- Get the cash you need. Loan amounts vary depending on the appraised value of your collateral item.
- Pay back the loan and reclaim your collateral. If you decide you don’t want to repay the loan, then let the pawnbroker know, and your item will be placed for reselling with no additional fees.
What Things Can You Pawn?
Pawnshops may vary in what they take or consider as collateral. At Pawn King, located in Stratford, CT, they take just about anything of value.
Popular items include:
- Game Consoles and games
- Luxury Watches
- Fine Jewelry
- Name Brand Tools
- Musical Instruments
- All Things of Value
Meet Will and Cheryl, owners of Pawn King. Cheryl said, “We pawn anything of value! The highest prices paid! At Pawn King, we strive to treat all of our customers with fairness and respect.”
Pawn King will consider anything of value. There is nothing too large. They even have a military surplus, the pawn on autos proving you have the correct documentation and ID and have a large selection of jewelry. They place their customers first. Stop in and meet them.
Pawn King knows that pawn shop loans work for their customers, and they are happy to help!