If you need some fast cash to cover an unexpected expense or to catch up on some bills, a personal loan might be the answer for you. However, not all personal loans are created equal. Keep reading to find out more about personal loans, and why a pawn loan might be a good idea for many people.
What is a personal loan?
A personal loan is an amount of money borrowed from a bank, credit union, online lender, or another person that you repay with interest over a set period, usually around 2 to 5 years. You can use the money for anything you need.
How can I get a personal loan?
Generally, you would need to apply through your bank or other lenders. You would need to provide lots of info on your job history and submit to a credit report. Then, you would need to wait for your application to be processed and hopefully approved. A few business days after approval, you would receive your funds.
Why might a personal loan not be right for me?
Generally, personal loans from banks that have favorable interest rates and terms are for people with excellent credit. If you do not have excellent credit, you might find that the interest on loans from banks or other lenders might not be worth it for your situation.
What is a pawn loan, and why might that be better for me?
A pawn loan is a secured loan, meaning that you would put something up as collateral for your loan. Unlike a personal loan, a pawn loan is a quick way to borrow money because there is no credit check or application process. Your loan amount is based on the value of the item you pawn.
For example, if you own a popular video game console, you can bring it to your local pawn shop, where your pawnbroker can figure out its value. Once the value is determined, your pawnbroker may give you a loan for a percentage of the amount of the appraised value of your console. They will go over the interest rate and repayment terms. From there, it is up to you to decide if you will move forward with your pawn shop loan.
If you decide to go for it, you will get cash in hand right then and there. If you repay your loan within the time frame of your agreement, you will get your console back. If you don’t repay, your pawnbroker will resell your item. You can obtain a pawn loan against anything of value.
Here are some basics of pawnshop loans:
- They’re usually for small amounts – The average pawnshop loan in the U.S. is for about $150.
- There are never any credit requirements – Pawn shop loans do not rely on your credit history. Your credit is not looked into. Taking out a pawn loan is not reported to credit bureaus, and failing to repay will never affect your score.
- The repayment periods are generally short – Repayment terms vary, but borrowers often have 30 to 90 days to repay a pawn loan and get their item back.
Why a pawn loan?
For people who are unable or unwilling to put their credit at risk or to obtain a traditional loan, a pawn loan can be an attractive option. Also, for people who do not have a bank account, who have bad credit or not enough credit, pawn loans are a source of quick money because there is never any credit check involved. Also, the consequences of not repaying a pawn loan are not as costly as failing to repay other forms of personal loans. Where you run the risk of ruined credit by not repaying a bank loan, you only risk not getting your item back if you fail to repay a pawn loan. No debt collectors will harass you. Bad marks on your credit can follow you around for many years and can be harmful to everything from housing to employment.
Additionally, pawn loans feature relatively low-interest rates. They are lower than title loans or payday advances, the rates of which can be up to 4 times more than the rate of a pawn loan. Pawn loans are also the fastest way to get your money. If you find yourself in need of cash, your local pawnshop can get you your money in a matter of minutes.
How can I get a pawn loan?
First, make sure you have an item or items of value. Pawnshops deal in all kinds of items, but some things are more in demand than others. Your local pawn shop will likely be interested in something like:
- Small Electronics
- Video games and video game consoles
Then, make sure you do your homework! Research items like yours online to see what they usually sell for. The more you know about the demand for your item, the better idea you will have of how much your loan amount may be. You can expect about 40% of the appraised value, but this will vary on a case by case basis.
Next, make your items presentable and have any accompanying paperwork or accessories. Give it a thorough cleaning and gather things like remotes, chargers, and the like. The more complete the item, the easier time your pawnbroker will have reselling it.
How can Central Mega Pawn help me with a pawn loan?
We offer a quick, convenient, and confidential method of borrowing money for members of our community. We also make every effort to extend the highest amount possible on our loans, because we want to help you. We are a safe and helpful alternative to payday advances and other predatory lenders. Not to mention, we have a robust online store, which means that we can reach lots of customers and can make the best offers on your items of value. Visit us today to see how we can help you get the money you need in a matter of minutes!