Sometimes, you are not fully prepared to deal with an emergency, such as a car breakdown, just when you intend to travel out of town for business. In addition, your savings may not be sufficient, and your friends are unwilling to part with the sum you require. So, what do you do?
Pawnshop loans are an expedient way to access cash in an emergency, and all you need is collateral to take out the loan. Nothing else. Most pawnshops will take vintage turntables, musical instruments, firearms, jewelry, digital camera gear, and the latest electronics such as smartphones.
However, certain items such as toys, damaged goods, and old technology devices are rarely accepted. There are several instances where the pawnshop loan is the best option. Here are the major ones:
In an Emergency
Pawnshop loans are quick and easy for emergencies. As long as you have collateral to hold the business when the loan is still pending, you are eligible. They don’t need a credit check to qualify or go through a rigorous application process. This comes in handy when you need quick cash to cover an emergency.
Pawnshop loans may be less costly than the penalty for utility reconnections or credit card repayment and so is an excellent option to prevent further charges.
While these loans are a bit more costly than conventional loans, you get the cash on time to take care of the emergency.
According to the National Pawnbrokers Association, $150 is the average amount given as a loan by pawnshops. This is sometimes sufficient in an emergency.
Typically, the pawnshop loans will not affect your credit score in any way, and you are free to walk away from the loan without paying a dime. The pawnshop retains your item, and they can sell it to recover the borrowed sum. But you have the option to extend or renew the loan of the agreed period to repay lapses.
Sometimes, you may find yourself in a bad credit situation that limits your access to loans. This is where pawn loans come in.
Pawnshops provide convenient and easy access to loans, especially for people that don’t have access to conventional loan facilities for various reasons. For example, it could be a bad credit score or missing documentation to fulfill the requirements.
You don’t need to have a good credit status for you to qualify for a loan. Take your name-brand musical instrument to the pawnshop for evaluation, and you get the approved loan amount. The item guarantees the loan, and there is no risk to the pawnshop. You won’t get harassed by debt collectors, and there is no legal requirement to repay.
Apart from the collateral, you must show you are above 18 years old and prove your identity.
You Have Lots of High-Value Items
You could be having a basement of valuable items you’ve chosen to hold on to because of their sentimental value. These items can unstick you from certain situations that you find yourself in by taking a loan against them. But you will need to prove ownership of the item to avoid dealing with stolen goods.
You need to pay the whole agreed amount to get your item back. When you accept the loan amount offered, you walk away with a pawn ticket and cash. You need the ticket to get your item back.
There’s an option of selling the item to a private buyer or even the pawnshop. This way, you get the cash without paying interest or fees on it, but you will have to deal with losing the item permanently. With pawnshops, you still have the option of getting your item back, unless you choose not to.