7 Advantages of a Pawn LoanGary Shif
When you have an emergency that requires finances that you don’t have, panic sets in. You can feel your body begin to sweat and heart beat harder.
Perhaps you have an unexpected medical bill. Maybe a storm just destroyed your roof, and you don’t have the money for the deductible. Maybe your only car just quit, and repairs cost far more than what you have in the bank.
You need emergency cash to get you by. You can’t use a credit card because you credit score is low. You can secure an unsecured loan from a pawn shop.
A pawn loan will allow you to have the cash you need right now with no questions asked. By the time you have finished reading this article, you will know seven advantages of pawn loans.
What Is Pawn Loan?
A pawn loan is also known as a collateral loan. To get a pawn loan, you visit a pawnshop with an item in hand that has value to you. The pawnshop owner will then evaluate the item and tell you how much cash it is worth.
The pawnshop owner then gives you a loan while you leave the item with them. This item is your collateral. It is the promise that you will pay back the loan.
You usually receive a loan that is worth 25 to 60 percent of your collateral. If you do not pay the pawnshop back in a specified amount of time, the pawnshop owner can sell your item to recuperate their loan.
The National Pawnbrokers Association says that a pawnshop typically gives a person 30 to 60 days to pay back their loan. On average, pawn shops will loan approximately $150.
A pawnshop loan is what’s known as a collateral loan.
When you borrow from a pawnshop, you will have to pay interest. Interest rates vary from 6 percent to 36 percent. It’s important to note, though, that you’re borrowing the money and paying interest for a short period of time.
With conventional loans, the interest accrues over months and even years. Pawn loans do not accrue since you have such a short payback window.
Here are the major advantages of pawn loans.
1. Cash Right Now
When you need emergency cash, you do need it right now. You do not have time to wait for bankers and paperwork.
Pawn loans are available instantly. When you seek a loan at the bank, you have to wait weeks while a board approves the loan and then it is eventually processed. Pawn loans cut out the middle-man of the bank board.
You bring in what you want to exchange for collateral. The pawn broker examines it carefully to evaluate its worth. Then you leave with your collateral loan in cash the same day.
2. Minimal Paperwork
Applying for a loan is a lengthy process in a bank. First, you have to determine if you qualify for loan from that bank. This determination involves a credit check.
Then you fill out an application which involves many pages of information.
With a pawn shop loan, you have far less paperwork compared to a conventional loan. Once the broker has your collateral, the loan process has begun.
3. Easily Accessible
Just about anyone can get a pawn loan. This is a secured loan in that you provide adequate collateral and then you receive the loan.
An unsecured loan or signature loans happen when you simply sign a piece of paper saying you’ll pay back the lender.
If you have adequate collateral, you can secure this loan. Your pawn broker will not care about your credit score. They may ask you a few questions, but pawn brokers typically make loans available even to people with poor credit.
4. Multiple Loans
When you seek a loan at a bank, you can typically seek only one loan. If you’re looking for multiple loans, you can secure them at a pawn shop. The pawnshop owner will just care that you have an adequate amount of collateral.
So, when you need a new loan, bring in a new item for collateral. Then you can get another loan and the cash you need.
Pawn brokers value your collateral, and thus they keep it in a safe, secure place. They will make sure that you receive your item back in the same shape that you gave it to them once you pay back your loan. After all, they want to continue to do business with you, so it’s in their best interest to care well for ou item.
6. Credit Rating
Taking a pawn loan does not affect your credit rating. Pawn shops do not bother to conduct credit checks because they only care that you have adequate collateral for your loan. Because they do not conduct credit checks, this loan does not go on your credit rating.
All banks conduct credit checks. This arbitrary number supposedly tells banks if you’re worth giving loan to. Thus, banks typically will not lend money to people with bad credit.
Pawn brokers, however, will work with you. But their work with you will neither raise nor lower you credit score.
7. Understanding and Realistic
When you can’t pay a loan back with a conventional lender, you will receive many phone calls from debt collectors. These collectors will hound you for their money. They’ll be unkind and unrelenting.
A pawn broker does not do this. They have your collateral. If you cannot pay back the loan, the pawn broker takes the collateral.
Also, if you cannot pay the loan back in the time frame, you can ask for an extension. You’re working with a real person when you work with a pawn broker and not with an institution. This makes your lender more understanding and realistic.
Seek a Pawn Loan with Confidence
If you need a loan, seek a pawn loan today. You only need a piece of collateral and an understanding pawn broker. You won’t have to mess with paperwork, and you’ll receive the cash you need today.
Additionally, you’ll be working with a person and not a bank. This increases the chances of working with an understanding, realistic individual.
Do you need emergency cash? If so, calculate a pawn loan with us today. We can get you started.