Pawn Shop Collateral Loans are a great option for customers who want to borrow money without going through a bank. Find out more about the process and how it works here.
Pawn Shop Collateral Loans are also known as pawn loans. A customer brings in an item of value and the pawn shop loans against the appraised value of the item based on current market values. These loans are used to help with short-term cash needs. If you need money, but don’t have other options, this is an option for you. This type of loan may provide quick access to cash while still providing the borrower with protection in case they default on their loan.
Pawn Shop Collateral Loans typically require some sort of property as collateral in order to secure the loan amount requested by the borrower. The types of property accepted vary from pawn shops, but usually include anything valuable such as silver, gold, coins, jewelry, collectibles, instruments, and electronics. Once the borrower pays back what they owe on time, they will get their collateral back.
“The term collateral simply refers to an asset that a lender accepts to secure the amount of the loan.”
How It Works:
Before a pawnshop like Western Loan & Jewelry issues a loan, we want you to know that the borrower has the ability to repay it. Because we have a valuable item to ensure that the loan will be paid back or if the loan falls in default the item will be sold to recoup the amount of the loan collateral loans are quick and easy for a customer to obtain. If the borrower can’t make a payment, Western Loan & Jewelry will work with the customer to extend the length of the loan as long as the interest is paid in full.
Pawn loans, known as collateral loans, don’t require credit checks which makes this a great option for people who need cash but may not have the best credit score.
The Interest Rate Explained:
Each state has rules regarding what rates and fees pawnshops can charge for pawn loans.
Instead of thinking of the interest rate, think of the interest as a finance charge. Fees can range from 5% a month to 25% a month. At Western Loan & Jewelry our pawn brokers will work with the customer on the terms of the loan within the constraints of state regulations. Pawnbrokers will clearly explain all the fees involved in each loan before the transaction is finalized. The terms are also listed on the pawn ticket.
Why Would Someone Need a Collateral Loan?
Life gets in the way sometimes. Unforeseen emergencies like a death of a family member, unexpected medical bill, or job loss may lead a person to needing a pawn loan. Also, a person may need cash quickly to secure a “great deal” or opportunity that they don’t want to miss. The fees associated with the loan are often less than having the “one time opportunity” slipping away or a utility being turned off.
Pawn Shop like Western Loan & Jewelry are one of the best places to get a quick loan without having to go through all the trouble with banks and other lenders. In order to qualify for a pawn shop loan, you need collateral. You will have an easier time qualifying for a pawn shop loan if you have more valuable items that will cover your interest rates and fees. Come in today and we will work with you so when you leave you have cash in hand and a smile on your face!