If you need some quick cash for a big purchase or you have an emergency, there are several ways to get what you need, such as taking out a loan. However, there are many types of loans out there, each with its own requirements. It’ll still take some time before a bank loan can be approved, so it may not be your best option if you’re pressed for time. If you really need the money in such a short amount of time, then you might try getting a pawn shop loan instead. It may not be your first choice, but it’s definitely worth giving a shot. Here’s what you need to know about pawn shop loans and how good are they for you.

Pawn Shop Loan vs. Other Loans

Pawn shops are practically like any other lender out there. They’re capable of lending you an amount of money that you then have to repay plus interest. They give out secured loans like other financial institutions where a valuable piece of property is used as collateral. However, the similarities end there.

A typical lender won’t go after your collateral until you default from your loan. On the other hand, a pawn shop will require you to actually bring your collateral to them, and it will remain in their possession until your loan is fully paid off. However, if you can’t pay them back, your collateral will be put up for sale at the pawn shop. It’s quite different from an auto or mortgage loan where you can maintain possession of the house or car that’s securing the loan. 

Another huge difference with a pawn shop cash advance is that your collateral isn’t something massive like a car or a house. It can be something as small as a piece of jewelry or a rare piece of coin that you keep in your collection. You can even use your TV, a vintage comic book, or some antique furniture. Basically, any item that has a very high value can be used as collateral as long as the item’s value is higher than the amount of your loan.

Pros of Pawn Shop Loans

A pawn shop loan is quite a desirable option if you have not-so-stellar credit and you’re unable to take out a traditional loan. Going to a pawn shop to get a cash advance won’t require you to present your credit scores. To top it all off, your credit scores will not be affected even if you don’t repay your loan. You also won’t be getting calls from debt collectors, so you’re pretty much off the hook.

Cons of Pawn Shop Loans

Of course, like any other loan vehicle, there are some drawbacks. The biggest and most obvious one is that you’ll lose the item you used as collateral if you don’t repay your loan. Whatever the item is, it will be claimed by the pawn shop and will pretty much be sold to other people who might be interested in your item.

There’s also the fact that pawn shops often charge absurdly high-interest rates for their loans. Expect to get interest rates between 5% and 25% a month. Some pawnshops also charge additional fees to pay for things like storage, insurance, or renewing the loan for a new term.

Conclusion

If you’re in a desperate situation and you need some quick cash, a pawn shop loan is definitely a viable option for you. You can pretty much get the money instantly as long as you have a valuable item to use as your collateral.

If you’re looking for a pawn shop in Princeton, KY, that offers quick cash loans when you need it, you can trust River City Pawn. Our pawn shops in Leitchfield, Owensboro, Murray, Princeton, Henderson, and Madisonville are more than happy to accommodate you if you ever need a cash advance. Contact us to learn more about our payday loans and instant cash offers!