Sometimes we find ourselves struggling to make ends meet between paychecks. No one wants to be in such a difficult situation, but sometimes life throws you a few too many curveballs. If you’re in need of fast cash now and don’t have time to wait on credit checks and approval processes at the bank, things may feel a little hopeless.
Thankfully there are other ways to quickly get the money you need. One way to get money in your pocket fast is through a pawn loan at your local pawn shop. Not sure what a pawn loan is? Read on to learn everything you need to know to help you decide if it’s the right option for you.
How to get a pawn loan at a pawn shop
Obtaining a traditional loan through the bank requires time and qualifications that many people simply do not have—it’s sad, but true. If you find yourself needing access to money and aren’t able to go through the usual channels, there is another option available: visiting a pawn shop and getting a pawn loan.
Pawn shops often help people get cash fast and with relatively low interest rates by allowing them to put forth personal property or possessions as collateral—this could be jewelry, electronics or another object of value. In exchange for this collateral, pawnbrokers lend out money.
Once a customer’s loan is repaid in full, the possessions used for collateral are returned to their rightful owner. Around 80 percent of all collateral is reclaimed by the owner after loans are paid off, but occasionally a customer decides not to retrieve their possessions. In these instances, items are sold to other customers in the pawn shop—there is no negative impact on the borrower’s credit.
Pawn shops are able to give out loans like this because the customer is putting down items worth money to cover their loan. While a bank runs your credit to ensure there’s minimal risk of them being left in the red, a pawn shop uses this collateral in the same way—in the event that you’re not able to pay them back, their money is covered by the collateral.
In general, pawnbrokers provide larger loans with more flexible terms and a lower interest rate than most traditional lenders do. They are able to do so because they have already established an alternate path to reimbursement, should they not be repaid by the person to whom they lent. Pawnbrokers are governed by the same federal laws as other designated financial institutions, including the Patriot Act, Truth in Lending Act, Trading with the Enemy Act and Bank Secrecy Act.
If you’re looking for a quick and confidential way to get cash fast, a pawn loan may be an option for you to consider. Loan amounts will vary based on the item you put up for collateral and the shop’s assessment of its condition, value and resale potential. Visit Harrison Street Pawn and Gun online to learn more about our establishment, then contact us to talk through how the pawn loan process works in our store.