Are you trying to decide between a pawn loan or a bank loan? You might think they’re the same, but the two options are quite different.
You may be relieved to learn the bank isn’t your only resource when you need to borrow money, but what exactly should you expect from a pawn loan?
What Documents Do You Need?
If you walk into the nearest bank and ask to take out a loan, you’ll immediately be bombarded with questions. The loan officer will ask for your identification, proof of your checking or savings account balance, pay stubs from the last six months, and maybe even last year’s tax return.
Banks don’t lend money easily. They must be convinced you are likely to pay the money back.
When you go into a pawn shop, it’s different. To fill out lending paperwork, all you need is an official, government-issued form of identification. That’s it.
Do You Have to Pass a Credit Check?
Banks will ask you to fill out a loan application. On this application, you will be asked for your Social Security number, which they will use to check your credit score. If your score is below a certain threshold, you may not be approved. If it’s mediocre, they may approve you for a loan, but tack on a high interest rate.
When you’re getting a pawn loan, you don’t have to pass a credit check. You can keep your Social Security number private.
Is There a Good Chance You’ll Get Approved?
Banks can be picky with loan application candidates. If you don’t meet their minimum income requirements or if they don’t like what you plan to use the money for, they may turn you away.
When you attempt to get a pawn loan, all you have to do is offer up an item of value. As long as the pawn shop and the item’s owner agree on a dollar amount, approval is automatic.
How Long Does it Take?
Bank loans can take days or weeks to process. Even after you’re approved, transferring the money into your account can take another day or two.
A pawn loan is the best option when you need cash fast. Walk in with your item and walk out with the cash in hand.
What Happens During the Repayment Period?
If you fail to repay a bank loan, expect steep late fees and collection agency calls. Failure to pay will go on your credit report and significantly lower your score.
With a pawn loan, you’re usually able to get an extension if the original repayment period isn’t working for you. If you decide you don’t want to pay the loan back, you simply let the pawn shop keep the item. You won’t owe anything else and it won’t bring down your credit.
What Should You Do?
As you can see, a pawn loan is a flexible, no-stress solution that can provide quick cash when you need it. Come into Premier Pawn and explore our loan options today.