Why Are Pawn Shops So Popular When You Need Money

Pawnshop loans have become far more popular in a sluggish economy. That’s because bank loans require you have employment and in many cases, if you had employment, you wouldn’t need a loan. You may have another source of income, such as unemployment or the repayment of a debt owed to you, but banks don’t consider those when you apply for a loan.

Going through banks and even payday loans often require you to fill out a mass of paperwork and wait for a response from the lender. If you have poor credit, your wait may result in the company declining your loan. That wastes valuable time when you need funds immediately. You then have to go to another lender, only to expect the same results.

With a pawnshop loan, there’s limited initial paperwork and the value of the object you intend to pawn is the most important part of the equation. If you already know the value, you can’t expect the pawnshop to loan you the full amount. They have to calculate in the interest rate and leave a profit if they have to sell the item, but once they appraise the amount they will lend on your item, it’s only a matter of filling out the paperwork and the money is in your hands within minutes.

The loan from a pawnshop is extremely confidential. Even more than one from a bank or other institution since there isn’t a credit check to alert other lenders of your attempt. You won’t have a hit to your credit score because of the loan, which can lower your ability to get a traditional loan elsewhere. If the amount of funds you require is small, it’s the best way to secure the funds to tide you over until you receive money from another source.

Even though you plan to pay off the loan at a pawnshop, the worst case scenario is that you can’t. In that instance, no creditors phone your home attempting to secure payment. Of course, you’ll lose the item you pawned, but if your need for the funds was important, it may be worth the loss. Sometimes utilities, a house payment or a car payment is more important than a piece of jewelry or other item.

A pawnshop loan is fast, easy and a simple method of securing the cash you need immediately without the hassle and the disapproving scrutiny of a loan officer. The ease of securing the loan makes it available for anyone, regardless of his or her credit or employment history.