When you are caught in a financial mess, all you need is some quick cash. However, such options might not always be available on your credit card or from your checking account. What could you possibly do when you fail to arrange cash fast even from family and friends? Well, you can bank on a pawn shop in the most critical times.
A pawnshop loan is akin to an emergency withdrawal that you are charged interest for. Moreover, you tend to get this as quickly as you want, without the need for any credit checks. Your banking history or income too, has no link with getting a pawn shop loan.
You simply put down any experience item at a Seattle pawn shop or anywhere else, as collateral and as per its value; you get a stash of cash. It is in fact, close to what a secured loan is. Once you pay off the loan amount along with interest applicable, you can get back your stuff you pawned. If you fail to pay back the amount on the fixed time, the broker gets to keep your pawn. The pawnbroker will generally sell off the item to make a profit covering the amount that the borrower got in return.
There is no eligibility involved in getting a pawn shop loan expect for having any stuff that is considered “of value.” Pawn shops have been around for very long. In fact, going far back in time, you did not have credit scores or salary stubs that vouched for credit worthiness after all.
How A Pawn Shop Loan Works?
- Once you realize that you hold something that is valuable but still need some emergency cash, you can apply for a pawnshop loan. A pawnbroker generally takes some time to appraise the item for understanding what it might be worth. Moreover, you can get a loan close to 60 per cent of the overall item value. At the very least, the loan amount you get might be around 25 per cent.
- The most common items that you can pawn include power tools, musical instruments, firearms, electronics and even jewelry. However, you will fetch lower value as loan on an item than it is actually priced. Most pawn loan providers charge a flat fee for finance instead of the annual percentage rate or APR. The APR varies between 13 and 1300 per cent. Just to give a head-to-head, an average personal loan might come with an APR of 9.65 per cent instead. However, the latter needs more organized documentation and systemized loan processing. A pawn shop loan is like access to an instant wad of cash.
- The loan repayment window might vary between 30 and 60 days. This is totally as per the discretion of the pawnbroker. Once you fail to pay back the amount against the pawned items, the broker keeps the latter with the intention to sell off the piece finally.
Are Such Loans A Smart Choice?
This depends on the situation or financial mess you could be in. A pawnshop loan is the easiest option when you are in need of immediate funds. Moreover, these are your best means when you are caught in a financial emergency that has no time to resolve. Of course, you need to remember that pawn shop loans are available for limited amounts only. You cannot expect anything more than a few hundred dollars from a pawn shop.
Always ensure that your financial planning is happening just right. Do make sure to hoard some rainy day funds too. Invest wisely. If at all you need a pawnshop loan, be careful of choosing the trusted pawn shop.