When you need quick cash to catch up on bills or to cover an unexpected expense, a personal loan might be the lifeline you need. But, before you sign on the dotted line, remember that not all personal loans are the same. At Central Mega Pawn, we want to help our community stay informed of their options when it comes to getting the cash they need; so, keep reading for some helpful information on what personal loans really are, and why a pawn loan might be the right choice for you.
What is a personal loan?
Generally speaking, a personal loan is money borrowed from a lender. The lender can be a bank, which covers credit card advances as well as traditional banks, or a payday advance company, or even another person. Usually, the amount is repaid with interest within a mutually agreed upon period, which may be anywhere from weeks to years.
How can I get a personal loan?
Applying for a loan from a traditional lender like a bank requires you to provide lots of personal information, such as your employment history, as well as submitting to a credit check. If your application is approved, you must then wait for the funds to be deposited into your account. Borrowing via a credit card advance is much simpler, but also financially risky, as interest rates for credit card cash advances are astronomical.
When might a personal loan NOT be right for me?
If you have less than perfect credit, or do not have a long history with your bank, getting a personal loan may not be worth the time. This is because you will face higher than normal interest rates, which may end up costing you much more than you intended to spend in the long run.
What is a pawn loan, and why might that be better for me?
A pawn loan is a quick and easy way to borrow money; there is no credit check or application, and no wait times for forms to be approved. A pawn loan is a secured loan, which means that the risk of granting you the loan is taken care of by the value of the item you pawn.
Your loan amount is based on the value of the item you pawn.
For example, if you own a designer luxury watch, you can bring it to your local pawn shop, where your pawnbroker will appraise its value. Once the value is determined, your pawnbroker will offer you a loan for a fraction of the value, as well as interest rate, repayment terms, etc. If you decide to accept the loan and the terms, you get cash in hand in minutes.
When you repay your loan within the time frame of the contract, you would get your watch back. In this way, your watch can act as a lifeline repeatedly when you need quick and easy cash. If you do not repay your loan, your pawnbroker resells your watch, and your transaction is completed. There is no harm to your credit, and you will not owe additional money.
Here are some basics of pawnshop loans that you should know:
- They’re usually for small amounts – The average pawnshop loan in the U.S. is for about $150.
- Pawn loans will never affect your credit – Obtaining a pawn loan does not require a credit check and your credit score will not be taken into consideration. Also, if you do not repay your pawn loan, your credit score will not suffer.
- Repayment periods are usually short – Repayment terms vary, but borrowers usually have 30 to 90 days to repay a pawn loan and reclaim their item.
Why a pawn loan?
Pawn loans are an attractive option for people who do not want to risk their credit score, or do not have access to traditional forms of funding. Pawn loans also tend to have relatively low-interest rates. They are lower than title loans or payday advances, the rates of which can be up to 4 times higher than the rate of a pawn loan. Pawn loans are also the fastest way to get cash. Your local pawnshop can get you the cash you need in a matter of minutes.
How can I get a pawn loan?
First, figure out the worth of your items. Pawnshops generally buy and sell all kinds of things, from tools to guitars, but your item must be in demand. Your local pawn shop will likely be most interested in items like:
- Video games and video game consoles
- Sports equipment
Then, research the value of your item. You can look at recently completed sales on auction sites or see what other people are selling the item for. The more informed you are about the value of your item, the more you will know what you can expect from your local pawnbroker. Generally, you can expect about 40% of the appraised value, but this varies on a case-by-case basis, as every pawnshop transaction is unique!
Next, make your items presentable and gather any paperwork, manuals, original packaging, etc. that you can. The more complete your item is, the higher it will be appraised. Whenever possible, give your item a good, safe clean. No one wants to deal with dusty items!
How can Central Mega Pawn help me with a pawn loan?
Central Mega Pawn offers the Inland Empire’s best experience when it comes to getting quick cash for your items. We are community oriented, meaning that serving our neighbors is one of our highest priorities. We make every effort to offer the highest amount possible on every loan, because we are here to help you. Central Mega Pawn is a safe and helpful alternative to more risky forms of borrowing, such as payday advance loans and other predatory lenders. Also, we have a bustling online store, which means that our customer base is far-reaching. It also means that your item may be more in demand than you think! Visit us today to see how we can help you get the money you need in a matter of minutes!