What is a Pawn Loan?
Have you heard the term “pawn loan” and wondered what it is all about? You may have in your mind the idea that all pawn shops are located in strip malls across America and are overflowing with junk that could be sold at a local yard sale. What you may not know is that a new breed of pawn shops has been born. High-end pawn shops are there to provide pawn loans for those with gold, silver, jewelry, Rolex and other luxury watches, and antiques.
The idea of a pawn loan includes using an item as collateral for a loan. The item is appraised, its value agreed upon and cash is instantly granted. At the time of the loan, monthly payment terms will be established and the pawned item is used as collateral. You can look at it this way… instead of a bank loaning you money on faith that it will be paid back, a pawn loan is based on the value of an actual asset. If the loan is defaulted on, the asset becomes the property of the pawn shop.
Because of today’s credit crunch and the unwillingness of banks to loan money to everyday people, many are turning to pawn shops for either pawn loans or to sell valuable items to gain instant cash. Jewelry loans can be quite beneficial in the case that one stays committed to paying off the loan as quickly as possible.
The beauty of a pawn loan is that you can obtain one regardless of your credit history, bankruptcy or a recent foreclosure. Once you obtain one, it isn’t reported to the credit bureaus and won’t affect your credit score. You are simply required to pay the loan off according to your agreement.
It is important that you search for a pawn shop that you trust and know the value of the item that you want to pawn. Carefully research its worth, and go in with a ballpark figure as to what you should receive. Great pawn shops will take time with you and answer all of your questions. Be aware of any that try to rush the process or make you feel uncomfortable. If you have found yourself in a financial crunch, a trustworthy pawn shop will help you get back on your feet!