The Reasons Why Banks Cannot Top Pawn Shop Lending

Everyday millions of people put on their best clothing, they print out their tax information, and they set out to the bank. Their goal is to get a loan. They go into a loan office and fill out paperwork to see if they get a sum of money. Whether it’s for personal reasons, for a car, for a house, or just about anything, they are going to be turned down. In fact, most people that apply for cash advances, credit cards, and more will get declined as well.Pawn Shop

You see, banks don’t lend out money as fast as they used to. You have to be in good standing with them, and have a good deal of money and history before you get moving forward. Without forward progress, you will not be able to gain access to their money. You may have everything in order, you may think that they are going to agree with your vision, but chances are, they will not. That’s where pawn options are going to need to be explored, including

The Difference Between Pawn and Bank Loans

First and foremost, you should know that a pawn shop can give you money. They do so in a loan format if you would like to go that route. What they do is simple. You can bring them something that is of great value, or medium value and then use that as collateral. You will be given a loan for the item, and that’s it. You can use the money anyway you’d like.

Now, you will have to pay back that loan and if you do so within the parameters of the agreement you sign, you will get your items back. If you don’t do it, however, you will not get your items back. It’s very important that you realize this aspect. However, the average person can remember to make payments and move along with no problem.

The main difference here is that you can get money without having to stress out. You don’t have to worry about rejection or credit checks. You simply need to have something of value to trade in. If you have that, then you are most likely going to get approved.

The Interest Rates Others Charge

When people find out options like, they are shocked by the interest rates. They aren’t as high as banks or even payday lenders. Payday lenders have recently come under fire because they are gauging people left and right. They are doing something that is causing serious stress. The rates that a payday lender will charge can be as much as 400%, and that’s on the modest end. You could ask for $500 and end paying $2,000 over the life of the loan. This is including minimum payments being sent to them. Simply put, this is a difficult thing to manage.

The interest rates that you may face with a pawn shop will be significantly, less, and most often, you will not have to deal with higher rates. Some shops don’t charge interest if you pay on time and you stay within communication of the shop’s staff. As long as you follow protocol, you’ll be just fine.

Helping People In Need

pawn-shopEven though some pawn shops have a bad reputation, it should be noted that they help people of all backgrounds. While banks only cater to those with good credit, pawn brokers help anyone that comes in. If you have things to sell, or want a loan based on items you have, they will help you. Banks don’t do that. They turn away a lot of people, and that’s no fun when you need a helping hand.