Pawn loans have been in existence almost as long as traditional loans have. There are substantial differences between them, but pawn loans do serve their purpose. A person may prefer a pawn loan to other loans for a broad variety of reasons:
Fast Processing
Traditional loans at banks take quite some time to be approved. The red tape often found at large corporations can be mitigated by taking out a pawn loan. When you offer your collateral at a pawn shop, an appraiser will quickly evaluate it and give you the loan. In most cases, the appraiser is the same person at the counter. The above make pawn loans Long Island a time-saving tactic especially in emergency situations where you need the cash. The interest rate may be a smidge higher at a pawn shop than at a bank, but it is a price well worth paying to avoid the paperwork and time wasting you will encounter at a typical lending institution.
Small Amount
A pawn loan is taken out against collateral. The collateral is usually something valuable such as a piece of jewelry. The amounts vary widely, but most people will take out a minimal loan which traditional banks would not give. As of 2010, the average pawn loan was $150. Pawn loans allow for customers to get small loan amounts where all other avenues such as friends or family have failed.
Less Restrictions
Banks have become very strict in their lending practices of late. In addition to finding out your credit score, there is a whole host of information that they need to verify in order for you to qualify for a loan. Given the long checklist that makes it almost impossible for you to get a loan, pawn loans Long Island are a healthy alternative. All you need is your collateral, a little bit of research and some bargaining skills and you have a loan. The risk factor is obviously higher when you contract a pawn loan, but it sure does bypass the restrictions you will find elsewhere.
Use of Family Heirlooms
In most cases, family heirlooms are just beautiful pieces of jewelry from which one can get no functional use. However, pawn loans Long Island change that completely. Precious family jewels do get their money’s worth when they are used as collateral when acquiring a pawn loan. The pawn shop’s assessment will be accurate, and you can confirm it elsewhere to find out the worth of your jewelry. Moreover, once you pay the loan, you can get back your precious jewels.