Pawn Shop Personal Loans
If you’re in need of some cash but don’t want or can’t go to a traditional bank to get the funds, one option you might be considering is a pawn shop personal loan. Today, there are more pawn shops than ever, due in part to changing regulations as well as a down economy.
According to the History Channel and it’s Pawn Stars program, there are currently somewhere over 12,000 pawn shops operating in the United States. (On a side note, if you’re considering taking out a personal loan by taking something to a pawn shop, you might consider watching this program. It’s very informative about the inner workings of how pawn shops do business.)
At any rate, if you are considering going to a pawn shop for a personal loan, here are some factors you need to consider:
- Pawn shop loans are fast and don’t require a credit check. If you have crappy credit and are desperate for the cash, it might be worth considering.
- Pawn shops won’t give you full credit for pawning your item. Let’s suppose your favorite necklace has a certified value of $1000. You’re going to be lucky to get $500 from the pawn shop for it. The loan will never be for what the item’s worth. It helps if you have an appraisal to help you argue your case, but the pawn shop wouldn’t be able to stay in business if they gave out full retail value.
- Pawn shop loans have high interest rates. In some cases, these rates are going to be as high as they would for payday loans. Some states have limits on how much you can be charged, so make sure you know what the rules are in your state.
- You have to pay to get your stuff back. In addition to interest and the principal, you might have to pay storage fees or insurance fees. If you don’t pay it in time, you are going to forfeit the item.
- You have to give a lot of personal information to get a pawn shop personal loan. Be ready to bring your driver’s license or state ID, as well as one or two other pieces of identification.
Photo via Colin Gregory Palmer