If you’re looking for a quick way to access cash, pawning valuable items may be a solution worth considering.
In New York City, pawn shops give you loans by using personal valuables such as jewelry, electronics, or collectibles as collateral, and they’re an accessible option for many people who need funds in a pinch.
Common Loan Types
When unexpected expenses arise, there are multiple ways for you to get money:
- Pawn Loan: This type uses a personal item as collateral.
- After the pawn shop sets the item’s resale value, a percentage of that value is provided as a loan. To get the item back, you’ll need to repay the loan with interest.
- It’s not based on your credit history but instead on the value of the collateral.
- But you do need valuable items to qualify for this type of loan.
- Payday Loan: This type lets you borrow a small amount of money that you repay with your next paycheck.
- These loans are mostly used for immediate expenses between pay periods.
- The interest rates are very high.
- They normally offer lower amounts than a full paycheck, which might not be enough for larger financial needs.
- Personal Loan: These loans can be provided by banks, credit unions, or lenders.
- They depend on your credit score.
- Secured personal loans need collateral, while unsecured loans do not.
- Interest rates and loan amounts differ depending on your financial situation and the lender.
Advantages of Pawn Loans
- Pawn loans give you immediate cash with a repayment plan that fits your needs.
- Since pawn loans aren’t based on credit, they won’t affect your credit score or financial standing in the future.
Disadvantages of Pawn Loans
- You must have a valuable item to offer as collateral.
- If you fail to repay the loan, the pawn shop may sell your item to recover their funds.
When in doubt, your trusted local pawn shop is the best resource to find out more about this.