Terms for pawn shop loans vary and often include high interest rates. This is why some states have stepped in to regulate the industry. If you move forward with a pawn shop loan, you can get the cash right then and there. For example: In Florida and North Carolina, state laws dictate that pawn shop loan contracts are 30 days, with an additional grace period.
According to the National Pawnbrokers Association, the average pawn shop loan in the U. You can pawn a variety of high-demand valuables — anything from collectable coins to cars. The consequences of not repaying a pawn shop loan are that the pawn shop simply keeps whatever you pawned. We update our data regularly, but information can change between updates. Confirm details with the provider you're interested in before making a decision.
Learn how we maintain accuracy on our site. The application and approval process for a pawn loan is simple. First, take in an item of value to be appraised. While pawn loans can only be done in person, short-term loans are accessible online.
They require you to complete basic information about yourself and provide proof of income. Both loans offer a fairly easy application process, but only short-term loans can be done both online and in person. It takes about 10 minutes to receive a pawn loan, depending on how long the appraisal takes.
Short-term loans generally take five to 10 minutes to apply for, and approval can be instant. Unlike a pawn loan, you must meet eligibility requirements that include your ability to repay the loan.
You can walk out of the store with cash, whereas online your funds typically arrive in your account the next business day. Short-term loans have higher associated costs. If you fail to pay off your loan and need to refinance the remaining balance, you may pay further fees and charges. Refinancing could negatively affect your credit. Pawn loans may offer lower rates, but these lower rates come with a risk of losing your collateral if you default on the loan.
While some pawn shops offer auto title loans , not all do. Some short-term lenders even provide other loan services, such as installment loans and title loans. Pawn loans are limited by the items used for collateral. Short-term loans can offer a wider variety of loans. Compare short-term loan options. Reed needed to pay off an unexpected car repair. Unfortunately, he spent most of his money on groceries just before his car broke down. Luckily, Reed had a Nintendo Switch he received as a birthday gift that he could use as collateral for a pawn loan.
He compared the options offered by his local pawn shop with an online short-term lender. In this case, the pawn store loan offered a better deal for Reed. Most pawn shops allow you to renew a pawn loan by paying the lending fee from the first loan.
Then the loan typically begins again for the same amount of time with the same terms and conditions. While you may not have to repay it, your fees will continue to accumulate. Both pawn loans and short-term loans are able to be renewed, but you should think hard before taking out a loan you may not be able to pay back on time. Trapped in a cycle of payday loan debt? Both pawn loans and short-term loans can get you cash in a pinch, but each can be filled with financial risk.
And neither are long-term solutions. Of course, fees will depend on the state you live in and the lender you use. Personal lending options to help you on your way to financial bliss. Aliyyah Camp is a writer and personal finance blogger who helps readers compare personal, student, car and business loans.
Aliyyah earned a BA in communication from the University of Pennsylvania and is based in New York, where she enjoys movies and running outdoors.
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Pawnshop loans are an expensive way to borrow money, but if you have no other options and need cash immediately, a pawnshop loan is better than an auto title loan or payday loan.
It can pay to shop around and compare offers from several pawnshops since quotes can vary substantially. You can take a photo of the ticket and email it to yourself as backup in case you lose it. Pawnshops are in regular contact with law enforcement to avoid dealing in stolen goods, so the shop may require proof of purchase or ownership of the item.
Items you can pawn vary by store and location. High-demand items typically include jewelry, firearms, electronic, tools and musical instruments. You then return within the agreed-upon time, usually 30 days to two months, to pick up the item and pay off the loan plus fees and interest.
Fees vary by state and can include insurance and storage charges. They may cost less than the penalty for being late with a credit card payment or a reconnect fee for utilities. They typically cost more than a traditional personal loan , but you also get the money faster and without the need for a credit check.
The biggest downside is the cost. If you find yourself reborrowing or extending a pawn loan, or pawning and redeeming the same item repeatedly, you need more than this short-term financial patch. Even the market can impact the value of the items being pawned. Change of ownership: Once you get the money, you are no longer the owner.
The buyer will then become the owner of the bought item. Loss of possession: One party will lose possession in exchange for money. In this case, you will lose possession of the item as the seller.
Below are several notable ones:. Ownership: It is the act, right, and state of possessing something. Interest: This is the charge included in the loan for the privilege of borrowing money, which is how the lender earns. Outlets: There are many pawnshops readily available in the market across the globe.
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