Business

How Is A Pawn Shop Loan A Good Idea?

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Times are hard and making ends meet is not easy. There are ways you can get the cash you need cash when you need it without getting yourself into more debt.

So what alternatives do you have?

If you want quick cash in a hurry, a Melbourne pawn shop can be the best alternatives. Both of these market themselves to people who have no other option to access fast cash and have valuables they wish don’t want to sell such as gold jewellery.

How do pawn shop loans work?

To get a Melbourne pawn shop loan, you take your valuable item to a pawn shop, the pawn broker assesses it and comes up with an offer. You can accept the offer and you are then required to sign an agreement detailing the repayment plan, the interest, and other fees attached. The agreement will also stipulate that if you fail to repay the loan, you will forfeit your valuables and the pawnbroker would have to sell them.

Average pawn loans on gold jewellery are usually about60 percent of the resale melt value of your valuables. You should try different pawn shops to find a broker who will offer you more vs what interest rate they can offer you.

A pawn loan does not involve a credit check because of the collateral you provide. You don’t even need to produce proof of employment or a bank statement. However, you do have to be over18 and have a valid government-issued ID document. Some pawn shops may ask for proof of ownership or a copy of the receipt.

If you fail to pay the loan back you could extend or renew the loan. It depends on the pawn shop. However, if you really don’t want to lose your valuables, you need to repay the loan on time.

A typical Melbourne Pawn shop loan can be be anywhere from $200 to $50,000. Upscale, high-end pawnbrokers can offer more. It depends on what you have to pawn. The more valuable and in-demand it is, the higher the loan offer will be.

The benefits of pawn shops

  • They offer loans that can help people who do not qualify for regular loans
  • There are no credit checks and no credit reporting if you fail to repay the loan.
  • If you do fail to pay the loan back, you won’t even have debt collectors harassing you.
  • You can pawn the item over and over. However, if you find yourself doing this, you may need more than a pawn shop loan to solve your financial problems.
  • The biggest disadvantage of a pawn shop loan is the cost.
  • Financial experts believe that for a loan to be affordable it should not have an APR no greater than 36%. A $200 pawn shop loan that is due in a month can run an APR of 120%.

You could sell your precious item to a pawn shop instead of pawning it. Pawn shops offer less money than a private lender because they have overhead costs they need to cover.

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