Pawnshops are a commonly used way to get cash quickly. Contrary to what you might think, pawnshops aren’t really for selling. They’re for getting loans. You bring your valuables to the pawnshop, have them appraised, and get some cash. In return, your valuables act as collateral for your loan, which you must pay back with interest. If you don’t pay the money back, the pawnbrokers can sell your items to customers. Of course, there are advantages and disadvantages to using a pawnshop, so it’s important to have all the facts including pawn shop alternatives.
Pros of Using a PawnShop
If you need a loan quickly, pawn shops can be pretty convenient. This is one reason they can be popular. Unlike a bank, you can walk in broke and walk out with a loan. There’s no credit checks or approval process, beyond handing over something of a comparable value.
Additionally, pawn shops are more likely to accept a variety of items for collateral. While jewelry and collector’s items can certainly be good collateral, pawnshops are often also interested in power tools, high-end electronics, appliances, video game consoles, etc. In other words, they have a broader sense of the word “valuable” than the banks might.
And of course, if you pawn an item, you can still get it back as long as you repay the money.
Cons of Using a Pawn Shop
There are, however, some significant disadvantages to pawnshops. Foremost, you have to pay interest on the cash you get. While interest is a standard for any loan, pawnshops often charge a higher interest rate since they’re not concerned with a rigorous application.
Typically, you also don’t get as much money as you think you will. While pawnbrokers are open to negotiation, they have to keep in mind the costs of refurbishing your item if they end up needing to sell it. And that’s the reality—if you don’t pay back your loan in full, they can sell your item. So, if you’re in dire straights, you might want to proceed with caution. Either be careful with the items you pawn or seek other options first.
4 Ways to Get Cash Besides Pawning
So, if you need cash quickly, what can you do other than pawning?
1. Sell Instead
If you’re thinking of pawning something, and aren’t really interested in getting the item back, it might be better just to sell it. Remember that pawnshops factor in the likelihood that they won’t get the money back into the loan. That means you might get considerably less money than your item is worth.
If you think you have something worth money, it’s worth searching for similar things on resale sites just to gauge it. If you have a collectable, for example, you can assess what people are listing the item for, as well as what people are actually paying. You might want to get it appraised if it’s a unique jewelry piece. Figure out your options, then go where you can get the most value for your valuable.
2. Personal Lines of Credit
If you don’t have anything to pawn, or you just want to keep your things safe, you can consider a personal loan or line of credit. Usually, you must go through a credit check, however, many companies still provide loans to those with lower scores. You can usually find out what you qualify for in minutes and get the money within a few days. There can be high interest rates, but you won’t have to gamble with your belongings.
3. Raise Funds
Depending on your circumstances, it may be worth looking into crowdfunding. Sites like GoFundMe can be a helpful tool for families or individuals who are in financial need due to emergencies or unusual circumstances. While you may have to get vulnerable, you can share your story across the internet and ask for help.
4. Get Entrepreneurial
If you don’t like to ask for money without doing something in return, try offering something in return. You can still share your story, and ask your community for help, without the complicated feelings that may arise. For example, if you have musical skills, maybe you can offer online workshops for those who donate. If you’re skilled in graphic design, maybe you agree to create digital designs for donors. You can even offer your services on a sliding scale. Who knows, it could even turn into something more full-time?
If you still need money today and don’t want to go to a pawn shop, apply for an online loan from Jora Credit today. It’s a simple application with a decision in minutes and funding as soon as today. Get started here.