The end of the month is coming up, and you realize that you don’t have enough money for next month’s rent. Don’t panic! There are ways to get fast cash, such as a pawn loan.
You’re probably asking: what is a pawn loan? Don’t worry. In this article, we’ll explain what pawn shop loans are, how they work, and how you can use them.
What Is a Pawn Loan?
A pawn loan is a type of personal loan you can take out by giving a valuable belonging of yours over as collateral. As the name suggests, you get this loan from a pawn shop, which is a place where people sell and buy secondhand items. They can also pawn items for quick cash.
How Do Pawn Shop Loans Work?
When you need some money, you take something of value to the pawn shop, such as a flatscreen TV or guitar. The pawn shop owner will assess the value of your item and give you a loan based on that.
Once you receive your money, you’ll have a certain amount of time to pay the loan off, plus the interest rate. If you do, you’ll get your item back.
If you’re not able to repay your loan at the end of the period, there are two options. The first is paying off the interest and an extension on repayment. The other is just leaving your belonging at the pawn shop; no more payments are necessary, and they’ll sell the item for cash.
Don’t Worry About Your Credit
The great thing about these cash loans is that not only can you get cash quickly, but you also don’t have to worry about any actions hurting your credit score. If you’re not able to pay back the pawn shop by the end of the agreed term, you walk away with no effect to your credit score.
How to Use Pawn Loans
You can use pawn loans any time you need immediate access to money and have valuable items you don’t mind parting with. You never know how your circumstances might change, so you have to be prepared to part with whatever object you put up for collateral.
If you’re confident you’ll be able to repay the pawn loan and get your belongings back, it’s a great option for getting a loan without having to go through lengthy paperwork and approval processes. All you have to do is take your item, go to a pawn shop, and walk out with cash in hand.
Get Quick Cash for Your Items
The next time you’re strapped for cash, you’ll know the answer to the question what is a pawn loan?
By understanding the ins and outs of pawn loans, you can quickly get the emergency funds you need to pay rent and buy necessities. You won’t have to waste precious time trying to figure out how and where to pawn your belongings.
Want to get into the minds of pawn shop owners? Then read our blog post on what pawn shop owners love to buy.