What you should know before you pawn.
When you need money fast, there’s no time for paperwork, or to answer questions about your credit.
You need to move quickly. Many people have found out that pawn loans are a good way to get money, but before making a decision, it’s important to understand how they work as compared to other types of loans.
This is what you need to know before asking for a loan (anywhere).
Let’s say your cousin asked you to borrow some money, and you go ‘sure.’ But deep inside, you know that you are running a risk. The risk that he won’t pay back. The same thing happens with financial institutions that lend money. They are running a risk, and they offset that risk by asking for something they can keep in case the borrower doesn’t pay the money back.
So, what´s a “collateral? The “collateral” is something you must promise to give the lender if you are unable to pay them back. Banks usually ask for property titles. Sometimes, they require a co-signor. A pawn shop will ask for items that range from musical instruments to power tools and jewelry. See what types of items you can pawn here.
Why do banks and other lenders ask for credit scores? Credit scores are used by banks to interpret your ability to pay. A bad credit score may render you ineligible for a loan at a bank. But this system is not perfect. A bank may not be aware of the whole picture, and some people with the ability to pay are unable to get cash advances at a bank. A pawn shop, on the other hand, does not require a credit check.
Rates: Besides asking for collateral, financial institutions (including pawn shops) will charge interest for the money they lend.
What happens when there is no collateral? No collateral usually means the lender needs to charge you higher interest rates. So, the fact that a lender asks for collateral usually means better rates for the borrowers.
Ok, sounds reasonable, but I don’t own anything to use as a collateral!!!!! You may think you don’t have a collateral, but chances are you do. If you decide to pawn, all you need is to look around your house, and you´ll find your collateral. Think of jewelry that’s sitting in your drawers, electronics, power tools, gadgets, game consoles, even sports equipment…
Pawn loans are supposed to be short-term loans. Is that a good thing, or a bad thing? Pawn loans are meant to be paid over a period of months. If you pay interests on time, you’ll be able to retrieve your item. If you don’t, the pawn shop will keep it, and that’s all. On the other hand, if you use a credit advance from a bank or a credit card to pay for an emergency, and you don’t pay the full balance at the end of the month, interests start accumulating. This can go on for months, and is the recipe for financial disaster.
Do I need to have a bank account to get a loan at a pawn shop? No.
Do I need a Social Security Number to borrow money at a pawn shop? Not at CashCo. At our pawn shops in San Diego, the only thing you need is a valid ID. It could be a passport from any country, a US driver’s license from any state, military ID, or a “matricula consular.”
At CashCo, we offer some additional advantages for our pawn loan clients:
- Pawn It Your Way. You get to choose the term of your loan: Some people prefer 3-month loans, other prefer a little bit more time to repay.
- Points to Prizes: Get Points when you pawn an item or buy an item, and exchange your points for goodies that go from treats to jewelry items and watches.
- Get a Quote Online Tool. Don’t feel like visiting us? Well, just take a picture of your items and send it to us.
In a nutshell, this is why pawn loans are more convenient than bank loans:
- They are a legal way to get money fast
- Fewer requirements than bank
- You don’t need a bank account
- You can borrow money even if you have bad credit
- You can get the money you need today, without hassles or major paperwork
- The item you pawn is your collateral
- You will not accumulate loads of debt if you are unable to repay the loan
Have questions? Contact us or just visit us at any of our pawn shops in San Diego. A CashCo employee will answer all of your questions.