Pawn Shops (Pawn Loans); Fast Money
Aldijana, Amy, Maddie, and Colin
What is a Pawn Shop?
A place where people in need of money either sell their own items of value or pawn them for a loan or quick cash.
How Are Interest Rates and Fees Calculated
It depends on the state laws in which the shop resides. For Example; Fees can not be higher than 23% per month in Indiana.
What Is The Average APR And/Or Fees Paid?
There are fees for the storage and holding of your item of value. Interest has a monthly average of 10%-12%.
The Source of This Type of Credit?
Pawn loans source from pawn shops.
A Pawn Shop Near You; Examples
AC Pawn Shop, and the History Channel (Pawn Stars).
Why Might A Consumer Seek This Type of Credit?
When in need of quick money, have bad credit history, or cannot get a loan.
Advantages and Disadvantages
Advantages include no credit check, and if the loan is not repaid, they are not turned into a collection agency. Disadvantages include, loosing valuable items if not repaid, loans are not set higher than 50% of value.
What are three alternatives consumers should consider before using this credit?
A payday loan - another source of quick cash
A title loan - opportunity fro higher loan numbers
Rent to Own - own the property as long as payments are made