Many of us need a little cash boost at the moment to get through an expensive month or special occasion and are weighing up the options available. So, for a quick, short-term loan option which is the better choice a pawn loan or a payday loan?
What are pawn loans and payday loans?
A pawn loan is a loan that you take out using an item that you own as collateral. This item will be worth more than the loan amount and during the loan term, the ownership will be transferred to the pawn shop. Once you pay off the loan including the interest you will get the collateral item back. If you fail to repay the loan, the pawn shop can sell the item to recoup the money.
A payday loan uses your next paycheck as assurance, and you have up to a month to repay the loan depending on when you are paid and when you take out the loan. These loans tend to have high-interest rates and can impact your credit rating.
Why choose a pawn shop over a payday loan?
There are many reasons to choose a pawn shop loan over a payday loan. Firstly, it is worth knowing that many states have prohibited payday loans or have set boundaries in place so that the borrower is not charged unreasonably high-interest rates. These still tend to have higher interest rates than many other loan options, but they remain popular due to the speed and short-term nature of the loans. However, a pawn shop loan can also offer speed and short-term loans without the high-interest rates.
Pawn shop loans are much fairer loans in many ways. Our loans offer fairer interest rates and more flexible term lengths to suit your needs. We also offer the opportunity to extend your loan if needed so that you don’t lose your collateral item if you can’t repay the loan by the end of the loan term.
Getting a loan from us is also very straightforward as all you need to do is visit one of our conveniently placed branches with your collateral item for us to appraise it and make you a loan offer. You can walk away with the money the same day.
We don’t even need to do any checks on you in terms of your credit rating or income like a payday loan company or any other loan company would. And our loan won’t affect your credit rating either.
So, for a quick, easy, and short-term lower-cost loan visit one of our 24 branches across the New York City area to find out what we can offer you.