Quick loans are easy ways to catch up on bills or to cover an unexpected expense. One example is the pawn loan, which is great for people who don’t want to risk their credit, which is quite different from a personal loan. Both options are great, depending on the person applying. But which one should you get as your lifeline?

Applying for a Personal Loan

A personal loan follows the application process of most financial institutions, requiring applicants to submit necessary documents such as the employment history and a credit report. Once approved, the applicant will simply wait for the money owed to their account. It might seem to be a simple process. However, it’s simpler to borrow money via a credit card advance. It’s also less risky than a personal loan.

If you have less-than-perfect credit or do not have a long history with your bank, getting a personal loan may not be worth your time. There is still a chance that you might get approved, but you’ll face higher than average interest rates, which might cost you more than what you intended to spend prior.

Pawn Loans are a Quicker, Less Risky Loan

Meanwhile, a pawn loan is a quick and easy way to borrow money that doesn’t require a credit check or application, which shortens wait times. A pawn loan is still a secured loan, meaning the risk of granting your loan depends on the value of the item you decide to pawn.

To qualify for a pawn loan, all you need to do is bring a valuable item to your local pawn shop. The item will then be appraised by the pawnbroker to determine its value. Once the value has been identified, the pawnbroker will offer a loan to you for a fraction of the value, including the interest rate and the item’s repayment terms. If you agree to the terms, you’ll get the cash within minutes.

Paying the loan within the time frame of the contract guarantees the return of your pawned item. Any valuable item can be pawned and serve as your lifeline when you need instant cash. However, keep in mind that failure to repay the loan or paying beyond the due date forfeits the pawned item. The store can then sell the item at its original price.

Personal Loans vs. Pawn Loans

Pawn loans can become attractive for people who do not want to risk their credit scores or do not have access to traditional forms of funding. Since they have low interest rates, they are also ideal if you prefer not to go overboard with what you need to repay monthly. It’s also a quick way to get cash, compared to personal loans that take days—even weeks—to get approved.

Pawnshops buy and sell all kinds of items. If you own any piece of technology, watches, jewelry, sports equipment, and valuable tools, they have value in pawnshops. Before dropping by a local pawn shop, make sure you know how much the item costs. In that way, you know exactly what offer to expect once you get to the shop.

Conclusion

Both personal and pawn loans are excellent sources of extra cash for financial emergencies. However, try to weigh which option suits you best based on the application process, the cashout amount, and the payment method. Go with the loan option that will give you the best deal and the best price.

River City Pawn is the best pawnshop in Murray to go for instant pawn loans. All you have to do is bring in the valuable item, and we’ll appraise it for you. Visit our other branches at Owensboro, Henderson, Madisonville, Leitchfield, and Princeton to learn more.