Below are seven of the most attractive pawn shops loans benefits compared to banks
1. Instant access
Instant access to funds is arguably the most attractive reason leading people emergencies to consider the move. Bank loans take time to be processed. Pawn loans, on the other hand, is a get-in get-it situation.
All you need is an item to leave behind as security. You get a sum equivalent to a fraction of your item’s value.
2. No credit checks
There being no credit record checks necessary for a successful pawn loan transaction attracts a lot of people. No bureaucracy is involved.
Pawnbrokers do not mind about credit-check policies. You qualify for a loan whether the credit bureaus have listed you. No one will ask you about credit history. All you need is a valuable item.
3. Access to multiple loans
If you walk into a pawn shop, then get back later in the day with another item, you still could access another loan. Even though this could vary from lender to lender, most of them are this flexible.
4. Credit rating remains intact
Your credit rating has nothing to affect it in a pawn loan transaction. Whether or not you can pay back your loan, there are no credit rating effects associated.
Banks and microfinance institutions, on the contrary, will immediately list you negatively at the first sign of default. Borrowing from pawn shops for small amounts, therefore, keeps you safe from negative credit scores that affect your future access to funds.
5. Item sale is the worst that could happen
In case of failure to raise the money borrowed, a pawn shop will simply keep your item. The result is a sale- only at a lower price. For this reason, always ensure to present for pawning only those items that you could afford to lose.
Banks will never give you another loan in the future should you fail to pay up. Bad credit scores are a huge barrier to accessing funds in the future.
6. No interrogations and fill in forms
Banks subject loanees to tedious paperwork and interrogations. There are a lot of protocols for pre-approval, call-backs, credit checks, processing, and final release.
Pawnshops do it differently. Only the contract is signed. It legally allows them ownership of the item pawned in the event of default.
7. Secure item storage
All collateral left at the pawnshop is kept safe. They maintain the value of the item as long as the loan remains active.
Final Thoughts
Pawnshops’ loans have become highly popular. Their straightforward approach gives them an edge over bank facilities near me shops pawn Caution is, however, necessary so that you only pawn what you could comfortably lose in case of struggle or default.