Pawn Loans

By: Hunter Stone

What is a Pawn Loan?

A pawn loan is when someone that is in need of money, allows an individual or often a company hold a valuable item in exchange for cash on the spot. The loaner allows the person a certain amount of time to repay the loan in order for the borrower to receive their item back. The APR and time span that the loan should be payed in varies, the person that loans the money has the power to set the time span and APR. The amount of money that the loaner allocates depends on the value of the item you are pawning. Pawn loans have affordable interest rates set by state law, the usual interest rate is 5%. Some online brokers charge an APR of 84%. People with bad credit usually seek pawn loans because they do not check credit history. Pawn shops are located all over the United States and thrive off of Pawn loans which provide great business opportunities for both the shop and the borrower.

Pro's and Con's

PROS

-Pawn loans provide you with instant cash

-Usually low interest Rates

-There are a wide variety of pawn shops that you can visit, making it easier to shop around and see what shop will give you a better deal.

-No credit checks

CONS

-If you fail to repay the loan, your item will be sold

-Extending loans can be very expensive

-Loans can be limited

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