Advantages of Pawn Loans Over Bank Loans

by | Apr 16, 2013 | Jewelry

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Years ago, going to a pawn shop was something you kept secret. Now in these tough economic times, people from all walks of life use Local Pawn Shops. loans. Pawn loans offer many advantages over conventional bank loans, especially if you need cash immediately. The National Pawnbrokers Association notes that 80% of people who get pawn loans pay back the loans and get their merchandise back.

Faster Way to Get Money

Pawn Shops. loans are much quicker to get than a bank loan. You do not have to fill out a lot of paperwork, undergo a credit check or wait ages for an approval. By bringing valuable items to a pawn shop such as gold, electronics or bicycles, you have already proved to the pawn shop employee that you have something valuable to offer in case you cannot pay back your pawn loan. Approval or denial of a loan takes minutes, based on what you have brought to pawn.

Paying Back the Loan

You do not have to pay back a pawn shop loan if you are willing to permanently relinquish the item or items you brought to pawn. The average length of time you have to repay back a pawn loan is 30 days, although some individual shops may offer a longer payback time. Some pawn shops will offer extensions based on state or local laws. Ask about the pawn shop’s extension policies before agreeing to a loan. In a traditional bank loan, you must pay it back on time or suffer harsh fees and penalties.

Does Not Affect Credit Rating

Getting a pawn loan does not affect your credit rating, even if you do not pay back your loan. Pawn shops do not report your activities to credit agencies. If you cannot pay back a bank loan, your credit rating will go down. However, getting a bank loan and paying it back on time will improve your credit rating. Paying back a pawn loan will not improve your credit score.

Accepts Firearms

Pawn shops will accept guns or other firearms. This is a good way to get firearms out of your home and get some needed cash.