3 Reasons To Choose A Pawn Shop Loan Vs. A Payday Loan
If you are looking for a loan option that will allow you to put some cash in your pocket right away, you could be thinking about taking out a payday loan. In some cases, these loans can be great for helping you out of a tight spot. However, many people find that there is a much better loan option out there: pawn shop loans.
The way that these loans work is simple; you bring in an item that you own that can be used as collateral, such as a video game console. Local pawn shops can grant you a loan, keep your video game console, and then give you a date by which you have to repay your loan. If you choose to repay the loan, you'll have to pay the money back plus interest before you can get your item back. If you don't choose to repay the loan, you lose the item to the pawn shop. These are a few reasons why this can be a better way to borrow than taking out a payday loan.
1. You Can Back Out of Paying with No Repercussions
For one thing, if you find that paying back the loan is difficult or impossible, you can simply let the pawn shop keep the collateral. There are no repercussions, and you won't owe the company any money. You'll even be able to go in and do business with them again afterward. This is not the case with a payday loan, in which you might face high fees for not repaying your loan, and you could end up with strikes against your credit or a court date.
2. You Can Choose How Much You Want to Borrow
With a traditional payday loan, you're generally going to be granted a loan based off of how much money you make. With a pawn shop loan, your income isn't taken into question. Instead, the amount of your loan is based off of how much the item that you bring in is worth. This basically allows you to choose how much you want to borrow.
3. It's an Easier Application Process
Many payday lenders advertise the fact that their loans are easy to qualify for. However, you usually have to fill out an application, provide proof of your job and income, provide references, supply your bank account information, and more. None of these things are the case with a pawn shop. To take out a pawn shop loan, you generally just have to bring in your item and your ID. It's super fast and easy.