Today, close to 30 million Americans are said to opt-in for pawn shops annually. Microfinance and banks provide people with competitive loan offers. Yet, people find it safe to opt-in for a pawn shop.
However, it is not possible to get loans of more than $100,000 in a pawn shop. But the majority of the emergencies don’t cost that much. Hence, if you need a small cash amount, a pawn loan is the best option. You can search for pawn shops open near me and choose the one that caters to your requirements.
There are several benefits of pawnshop loans over other kinds of loans.
1. Loans are instant
The best benefit of acquiring a pawn loan is its processing speed. The bank loans can take weeks to processed and sanction. You can get a pawn loan faster. When it comes to pawn loans, you need to have collateral. You need to carry the collateral to the shop and get it exchanged for the required amount. The loan is a fraction of the item value. When you decide on a fair amount, the owner can take the item and instantly provide you the money. They don’t require days for sanctioning the thing and conduct surveys. The process is reliable when you need fast cash.
2. No credit checks
One of the reasons for which most people opt-in for pawn shops is because of their no-credit policy. A pawnbroker isn’t worried about your negative or positive credit score. They will not ask you anything about it; your collateral is the security for the loan. It means the only thing you need to qualify for a pawn loan is a valuable item. However, that doesn’t mean that the value should be worth millions. The pawnshops usually deal with small loans that are below $100k. That means a diamond ring or the golden vase in your room is acceptable collateral.
3. Zero impact on the credit rating
Since the pawn loans don’t bother with credit checks, the services don’t impact credit ratings. The lousy aspect of getting loans with micro finances and banks is that the late payment gets reflected on the credit performance. The bad credit rating will adversely impact your capacity to borrow money from the lenders. Just in case there is another emergency, you will not know how to source funding. It’s a good idea to use pawn shops for a small amount to steer clear of bad credit scores.
4. Multiple loans
When you are at a pawn shop, you can get multiple loans. It’s because the loan receives based on the collateral you carry. To bring in new collateral for every loan request, you can get the cash. The other lenders might not be this flexible. In most cases, they will expect that you repay the loan before you apply for another loan. It is till such time your first loan was below the paying capacity. These lenders aren’t favorable when you need to take your money for multiple emergencies.
These are some of the advantages of pawnshop loans in comparison to any other lending option.