When you need cash, one of the options you have is to go to a pawn shop. Using a pawn shop is sometimes a better option than, let’s say, a payday loan (USA Loans Near Me, Inc). You may be able to get cash at a pawn shop for less in terms of fees than you would from a payday lender. In fact, many pawn shops today have payday loan capabilities on site, so you really can compare the two intelligently.
How does a pawn shop work?
A pawnshop lends money to its customers based on items of value that the customer brings in. The items are typically things that hold their value over time, and are relatively easy to store. The customer provides this collateral in order to secure a loan.
The lender then gives the customer a loan. Interest rates will vary from one state to the next, and from one borrower to the next. In general, the interest rate at a pawn shop will be higher than you might be able to get from a bank on a personal loan, but will usually be less than what it is for a payday loan.
How much will a pawn shop loan?
Most of the time, a pawn shop loan is small. They average about $80. Some pawn shops will lend as little as $20 or as much as $1,000 or more, depending on the collateral that the customer brings in. In most cases, a pawn shop won’t do a credit check on the customer, but if they do then that will also affect the amount of money they’re willing to lend.
How long does a pawn shop loan last?
The average length of a pawn shop loan is about 30 days. This can vary from one state to the next, as well. A pawn shop loan is typically longer than the 14-day average of a payday loan, but much less than the time frames of bank loans, which are usually a year or longer.
What happens if the loan isn’t paid?
Vinnie and his two goons will find you and make you pay.
Of course, that’s not true at all. That’s just what happens in the movies. In the real world, the item that the customer brought in as collateral just becomes the property of the pawn shop. The customer has a certain amount of time to try to pay back the loan once it’s overdue. That period varies from one state to the next (learn more about payday loans in NC), too, but is usually between one and three months.