Currently, an estimated 30 million Americans are enjoying the advantages of pawn loans. Here’s why they keep coming back:
- Pawn loans offer instant gratification
The processing speed is one of the best selling points of a pawn shop loan. Unlike loans from a local bank, which can take several weeks to process and approve, most pawn shops can lend the money you need instantly.
In a pawn loan, you must offer collateral (an item to pledge as security for the loan) in exchange for money. As long as your item is valuable and passess authenticity checks, then you will walk out of the shop with some cash.
Before you schedule an appointment at a pawn shop near you, we highly encourage adding the following blogs to your reading list in order to maximize your experience:
- No credit checks
Millions of Americans use pawn shops for loans because of the no-credit-check policy. The only requirement is to bring a high-value asset with you.
- No nerve-racking interrogations and paperwork
The process in a bank loan request takes ages to complete due to the number of steps one has to follow. It begins with pre-approval, wherein the bank determines whether you qualify for the loan. Then follows the application processes, which includes filling up and providing dozens of forms related to your financial capacity and loan agreement. Interrogation and investigation — wherein bank officials conduct surveys and interviews — are additional steps often included in bank loan approval processes.
By the time you receive your loan, a brand new model of the smartphone you’ve always wanted has been released. Jabs aside, the long process can be vexing and stressful.
A pawn shop also provides paperwork, but in most cases, you will only have to sign one contract that details the terms and conditions of your loan.
- Pawn shop loans do not impact your credit rating
Because pawn shops do not conduct credit checks, acquiring a loan from them will not affect your credit rating. On the other end of the spectrum, late payments to banking corporations and microfinances will reflect on your credit performance. Having a negative credit score will hurt your chances of borrowing large sums of money from banks and financial institutions in the future. This may leave you feeling hopeless, especially during emergencies.
It is recommendable to use pawn shops for low- and middle-cost funding requirements to avoid bad credit scores.
- The only consequence of not repaying a pawn shop loan is losing the item
For most people in the United States, life is anything but a piece of cake. 43 million Americans are struggling with most or all aspects of their financial lives, and 135 million are struggling with some aspects of their finances. That being said, not everyone has the capacity to pay their bank loans on time. If you fail to pay a bank loan, you will lose the credibility and reliability necessary for acquiring future loans from most financial institutions.
A pawn shop is the go-to alternative because if you fail to pay a pawn loan, then the pawnbroker will simply acquire ownership of your collateral. Of course, a disadvantage here is if the item has sentimental value to you, then you will risk losing ownership.
A quick pro tip: When it comes to pawning in Scottsdale, AZ, only choose an item that no longer sparks joy. Your engagement ring and wedding band from a broken marriage, the Patek Philippe Nautilus from your ex, and the family heirloom that none of your relatives or children want are perfect examples.
- Your collateral or item is safe and secured
A reputable pawn shop stores all collaterals in a safe place, often complete with high-definition security cameras and bulletproof vaults, depending on the value of the item. Moreover, the pawn shop ensures to maintain the quality and desirability of the item throughout the loan term.
After paying off the money you owe, your item should be returned to you in the same condition it was in prior to handing it over. If the pawn shop loses or damages your item, you can use your contract to demand a refund or report the issue to local authorities.
- Interest is per borrowed period
Many pawn shops in Chandler, AZ charge interest monthly, which means that if you can pay all the money back within the first month, then you only need to pay interest for that month.
Regardless if your agreement is 30 days or three months, the pawn shop earns more interest the longer it takes you to pay back the money you owe. However, the contract you sign may restrict the duration of loan payment.
The Bottom Line
Pawn shop loans can be a convenient option if your credit rating is bad and you are not eligible for a traditional loan. Failure to repay your pawn loan will not impact your credit score, and you never have to worry about getting calls from persistent debt collectors. Plus, the consequence of not repaying a pawn loan is that the shop simply keeps whatever you used as collateral. Just remember to avoid pawning items with sentimental value.
Experience the Benefits of Pawn Shop Loans
Ideally, you never want to be in a position where you have to pawn your valuables. But if you find yourself in dire need of fast cash and think a pawn loan is your best option, then consider doing business with Biltmore Loan and Jewelry. Not only do we say yes when the bank says no, but we also buy or loan on most anything you own. Contact our office at 480-991-5626 (Scottsdale) or 480-705-5626 (Chandler) to schedule an appointment.