There is a reason why pawn shops continue to be in abundance. There are millions of people around the globe that use the services of a pawn shop to seek a loan every year. Sometimes, turning to a pawn shop is a much safer mover than choosing a microfinance institution or bank. However, you should keep in mind that a pawn shop does not offer loans of over $100,000. But, in times of emergencies and when you need small amounts of quick cash, it might be best to head over to your nearest Pawn shop. There are many benefits of taking out a pawn shop loan as compared to any other type of loan. These benefits are mentioned below.
- Instant Loans
If you require an immediate loan, then, a pawn shop loan might be just what you need. The processing speed of a pawn loan getting accepted is a lot faster unlike bank loans which easily take up weeks on end to get processed and accepted. On the other hand, pawn shop loans tend to be instant. All you need to do is visit the pawn shop and have your gold items and valuables accessed to be used as collateral and you will be able to receive a loan. You have to carry the items with you to the pawn shop in exchange for the amount required. The loan amount would be a fraction of the items’ value.
- Lack of Credit Checks
Credit checks are time consuming and can be rather discriminatory. This is why pawn shop loans offer a better option since there is no-credit-check policy. It does not matter whether you have a positive or negative credit score. It is something that the pawnbroker would not even ask. The collateral taken is sufficient for receiving the loan. You only need to possess a valuable item to receive a pawn shop loan.
- Does Not Affect Credit Rating
Another great benefit of taking out pawn shop loans is the fact that such loans do not affect your credit rating. Besides, since there are no credit checks, it is obvious that there would be no implications on your credit rating. It is best that you consider a pawn shop loan for low amounts.
- No Burdensome Paperwork or Interrogations
One of the main disadvantages of seeking a loan from a bank or microfinance institution is the fact that they have burdensome paperwork and interrogations. It takes a long time for a loan request to be processed and a number of protocols need to be followed. Getting a pawn shop loan is simple. Although there is some paperwork involved, it is only a loan agreement which needs to be signed as it provides ownership of the item in case you fail to pay your loan.
A pawn shop loan offers many benefits. From instant loans to lack of burdensome paperwork and interrogations, pawn shop loans offer a great alternative. However, it is vital that you choose the best pawn shop in town that accepts all your gold items, gold jewelry, and gold coins. Consider a pawn shop that offers the cheapest loan rates in town. Only visit a pawn shop that shows its rates.