Pawn Loans

A Type of Alternative Credit

What is a Pawn Loan?

A pawn loan is based on the value of that property. It is held until the borrower repays the loan.

Interest Rates and Sources

Interest rates and fees are calculated by the State law. The average rate is 5%. A pawnbroker will sell the item if the loan is not paid in time. If the pawnbroker is unable to sell the item for enough money, then the borrow must pay the remaining debt. Some pawnbrokers charge and APR of 84%. Stores are nationwide and there are various online shops to choose from. The Pawn Company and Jewelry Barn & Pawn Shop are examples of stores here in Bowing Green, Kentucky.

Some Pawn Shops in Bowling Green

Advantages & Disadvantages

People use this when they can not get any other loan. There are no credit checks and people will only lose their personal item(s) if they are unable to pay the loan. However, loan amounts can sometimes be limited, and extending a loan can be extremely expensive. However, there are alternatives. Payday loans, title loans, and rent-to-own loans are all alternatives