When you need urgent cash before your next payday, one of the best remedies is a pawn loan. These loans are a form of secured short term loans. The amount of money you can access via this lending option will vary depending on the collateral you’ve offered and the state regulations in your area. Typically, you should repay the loan in 30 days or more, depending on your agreement with the lender.
Pawn loans typically range from $75 to $150, and you require collateral to access the loan facility. When paying back the loan, the lender requires you to pay back the principal and interest. The interest can be as low as 10% and as high as 200% depending on where you reside.
The collateral you need to secure a pawn loan should be a valuable item such as jewelry, musical instruments, firearms, photography equipment, or any other item that the lender may advise. If you don’t repay the loan as you had agreed, you risk losing the collateral to the lender.
When you decide to apply for a pawn loan, your first task is to find a trustworthy and reliable lender offering this service. Before visiting the lender, look for a valuable item that will act as security for your loan. Ordinarily, pawnshops will provide you with a loan between 25% and 60% of the collateral’s resale value.
After visiting the lender, you need to agree on the terms of the loan. For instance, you can agree to repay the loan in 30 or 60 days. The interest payable on the loan depends on several factors, including your loan history with the lender and state laws in your jurisdiction.
When you agree on the loan terms and amount, the lender will give you the cash and a pawn ticket. Remember, you’ll need this ticket when collecting your item. If possible, take a photo to act as a backup. The ticket contains relevant information about the loan, such as the amount, the loan terms, interest, grace period, and the exact date the lender will consider you to have defaulted on the loan. Since this is a vital document, please keep it safe.
The last step is to repay the loan. If you pay the loan as per the contract, the lender will return your item. On the other hand, if you fail to pay the loan on time, you pay extra charges as a penalty for the late payment. If you exceed the allocated grace period, the lender can decide to sell the item to recover their money.
Pawn loans are a fast way of accessing money since such loans don’t follow a stringent application process. You don’t need to be taken through a credit check when you need the loan, as is the case with most personal loans.
Many states have come up with strict laws to regulate this industry today. This is partly because of the high-interest rates associated with the loans and because their terms vary considerably from one lender to the other.
For example, if you own a high-end camera and need a loan, you’re only required to take the item to the pawnshop. The lender will assess your item and lend you the amount of money equivalent to its value. Typically, you should repay the loan in full, including the interest, to reclaim your pawned item.
The National Pawnbrokers Association considers the average pawn loan to be $150. If you’re in a state like North Carolina or Florida, the laws in this state dictate that you should repay the loan in 30 days with an extra grace period. Applying for pawn loans online is becoming trendy since the process is fast and secure.
Most pawnshops have also gone digital, making access to these loans fast. Applying for pawn loans online is very convenient, fast, and secure.
When determining the value of your item, the pawn loan lender considers several factors, including the condition of the item, its appraised value, and the ability to resell it. These lenders rely on advanced research tools to arrive at the value of your item. The appraisal process for each item varies, and the item must be tested to determine if it’s in perfect condition.
Although pawn loans are a quick way of getting money without the strict guidelines offered in traditional loans, they attract very high-interest rates. The interest rates change from state to state, and usually, they range from 10-250%. You may also pay extra fees, such as insurance and storage fees.
If you don’t pay the loan, you can face several consequences, including losing your item. In this case, the owner may choose to resell the item, or they may transfer the ownership to themselves.
If you need a small amount of money urgently and want to avoid the strict rules associated with conventional loans, a pawn loan can be your best solution. If you have a valuable item you can surrender as security for the loan, the process becomes easier. However, before agreeing to the loan and signing on the dotted line, ensure you read and understand the terms and conditions keenly.
It’s also essential to consider any viable alternatives before making your final decision. Online pawn loans are the best option considering the ease of access. The next time you’re financially stressed, don’t suffer in silence. Contact us now for any assistance!