- December 28, 2020
- Posted by: pawnusa
- Category: blogs
In today’s economy, with the current pandemic, many people struggle to make each end meet. According to the U.S. Financial Health Pulse Report, about 43 million Americans are struggling with most, if not all, aspects of their financial lives. While over 70% are living with some type of financial problem.
During the times when we struggle financially, many have considered taking a loan as our last-ditch solution. Then eventually, this solution has become mainstream. People take loans to pay off other loans — then the cycle begins again. While loans have helped us during our needs, we still can’t deny that their interest rates are really high. The average interest rates for personal loans in the US ranges between 10% and 28%. Lucky are those with an impressive credit score as they will get a loan with lower interest rates.
Why get a pawn loan?
Pawn loans have become an increasingly popular solution to secure quick cash. So long as you have valuable items at hand, you will be able to get fast cash from them. Compared to applying for online loans from shady financial institutions, pawn loans will help you with your financial needs based on the items’ current market value.
Other reasons why it is better to avoid online loans and just get a pawn loan are as follows:
- No credit score checking
People with bad credit scores will significantly benefit from pawn loans as pawnbrokers will not check your credit score or credit history. It wouldn’t hurt your credit rating either. The loan you will receive will depend on the value of the item you will bring as collateral– luxury watches, jewelry, heirlooms, gadgets, etc. And if ever you won’t be able to pay the loan back, pawnbrokers will not report you to credit bureaus; instead, they will sell your collateral to pay your loan.
- Less paperwork
With a pawn loan, there will be no lengthy documentation or validation needed. As long as you have a valid identification with a luxury item as your collateral and its necessary papers, you will be guaranteed to receive a loan.
- Lower interest rates
Another downside with applying for an online loan in financial institutions is that your interest rates will depend on your credit score; the higher your credit score is, the lower your interest rates will be. Whereas if your credit score is bad, there is a chance that your loan application will be rejected or might get approved but with higher interest rates. But with a pawn loan, you will get a fixed interest rate, which is also lower than payday loans.
- Your valuables are secured
We always have that one or more items that hold a special place in our hearts. However, due to unfavorable circumstances, we decide to sell these items or have them pawned. Bringing your precious items in a pawn shop as collateral for the loan you are applying for gives you the guarantee that these items are in good hands and that you can still get them whenever you pay off your loan.