Pawn Loans Versus Bank Loans: What’s the Difference?

When you need money – and fast – you might have a couple of different options flash through your head. You may think of getting a loan from the bank or visiting your local pawnshop. What do these different options mean? What is a pawn loan and how is it different from a loan from the bank? Your local pawn shop in Brea is here to untangle the differences between these two types of loans so you can make the right decision for yourself.

Pawn loans work like this: you bring in an item of value and use it as collateral on a loan. Once the loan is paid in full, with some interest set by local, state and federal governments, your item is returned. If you cannot pay back the loan, then the shop will keep your item to sell.

On the other hand, bank loans require you to work with a loan officer through the bank. The loan officer will need to check your credit score among other things, in order to approve the loan. These loans can have very high-interest rates, and if not paid off, can haunt you and your credit score for years to come.

There are a lot of benefits to working with a pawnshop. First, pawn loans do not require credit checks, making the process of getting cash quickly much more seamless and painless. Pawnbrokers evaluate your item, you both sign a ticket of agreement and then you are given the value of the item in cash.

Since pawn loans are not attached to your credit or too big corporate banks, asking for a loan extension will not be a drawn-out process nor will it negatively impact your credit score. Pawnshops are local, community-driven businesses, so you can always try and ask for an extension. Each shop has a different policy as to how they handle extensions, so be sure to ask your local pawn dealer.

If you’re looking for quick cash, a pawn loan might be the best fit for you. Pawnshops work for their community, serving members to the best of their ability. Looking for a loan? Imperial Pawnbrokers near Yorba Linda can help you get started. Contact us today for more information.