A pawnbroker loan is a personal loan secured against an asset. The loans can be used for all sorts of things like home improvements, repairing a car, consolidating debt, paying medical bills or to pay for a holiday. TV shows like Posh Pawn and Pawn Stars have raised awareness about pawnbroker loans but how much do you know about how the process works? Here, we take an in-depth look at pawnbroker loans, how they work and what you can use as collateral.
How Do Pawn Shop Loans Work?
If you have an asset, like a watch or jewellery, you can use this item to secure a pawnbroker loan. A pawnbroker will assess the item and offer you a loan amount, based on the value of the asset. When you’re ready to redeem the loan, you simply pay back the capital and interest that’s owed.
Although you use an asset as collateral when you take out pawn shop loans, you don’t sell or give up ownership of the item. Instead, the item is kept in secure storage facilities until you choose to redeem the loan. Once the loan is repaid, your item is taken out of storage and returned to you.
As you can see, pawnbroker loans are simple and straightforward. You simply choose an item of value that you want to pawn, bring it along to our offices, and we’ll offer you a loan amount in cash.
Who Can Get Pawnbroker Loans?
Pawn shop loans are open to everyone and are one of the easiest ways to access cash quickly. While millions of people use pawnbroker loans to realise the value of their assets, they can be a great option for businesses too.
If you’re a business owner and you’re facing a cash flow shortage or you’ve got a large tax bill to pay, a pawnbroker loan could be a fast and easy way to access the funds you need. With no lengthy application process and no credit checks, pawn shop loans can keep businesses afloat and provide a flexible solution to any financial requirement.
What Can You Use as Collateral?
You can use virtually anything as collateral for pawnbroker loans, but the value of the item will determine how much you can obtain as a loan. People commonly use watches, jewellery, and diamonds as collateral for pawn shop loans but it’s not unusual to pawn cars, motorbikes, electronics, musical instruments, and even paintings or art.
Essentially, anything of value can be used as security for a pawnbroker loan and you might be surprised at how many valuable assets you’ve got laying around at home. Luxury items such as handbags, designer jewellery, valuable collectables may be sitting around at home and could be put to good use as collateral. There are a variety of items that can be used to secure a pawnbroker loan. Read this related article: The Weird and Wonderful Things Found in a Pawnshop
Can You Get a Pawn Shop Loan with Bad Credit?
There are no credit checks carried out when you request a pawnbroker loan, which is why they’re a great option if you have a bad credit history. You could spend ages searching for bad credit loans but with a pawn shop loan you can access the cash you need in minutes.
The amount you can borrow is based solely on the value of the item you’re using as an asset, so your income, outgoings and credit history don’t affect your ability to get pawn shop loans at all.
How Long Does It Take to Get a Pawnbroker Loan?
You don’t have to fill out lengthy application forms or undergo a time-consuming assessment when you get a loan from a pawn shop. Instead, the item you want to use as collateral is valued and you’re offered a cash loan instantly. So, it can take minutes to arrange a pawnbroker loan.
As a quick way to borrow cash, it’s not surprising that an increasing number of people are choosing to use pawn shop loans to bridge cash flow situations. While traditional loans from banks can take weeks to be approved pawnbroker loans can be arranged in minutes and are ideal as loans for people with bad credit.
What Happens If You Don’t Pay Back a Pawn Shop Loan?
If you choose not to redeem your loan, the item you used as collateral would be sold to recoup the capital and interest that was borrowed. Pawnbroker loans are quite flexible and give you the option to redeem the loan at a time that suits you.
Can You Pay Back a Pawn Shop Loan Early?
Yes. If you want to pay back a pawnbroker loan early, you can do so at any time. This will reduce the amount of interest owed and mean that you need to pay back less overall. Similarly, if you want to pay off chunks of the loan early, but not the full amount, this can also reduce the amount of interest that will be paid for the remainder of the loan term. Being able to repay your loan early gives you maximum control over your borrowing and gives you the option to redeem your items as quickly as you choose.
How to Arrange a Pawnbroker Loan with Maxcroft
At Maxcroft, we offer a convenient and confidential service. Our office location ensures privacy and discretion, which makes it easy for our customers to pawn items in total confidence. Simply arrange to visit our offices, and we’ll assess your items and make a loan offer in cash.
Are you interested in taking out a pawnbroker loan in Essex? Maxcroft has over 40 years’ experience, offers outstanding service, and issues loans against assets & valuables. If you’d like to discuss an item that you are considering selling, take a look at our pawnbroking website page here or contact us on 0208 518 1828.