Pawn Shop Prices vs. Payday Lenders, Car Title Loans, and High Interest Credit Cards!

Pawn Shop Prices vs. Payday Lenders, Car Title Loans, and High Interest Credit Cards!

If you’re thinking about pawning something and wondering what pawn shops are open near you, or it’s the first time you’re thinking about pawning something to get some quick cash, you’ve come to the right place. However, there are some important things you should know first.

For starters, pawn shop loans have been around since like the beginning of time. No really.. From Kings & Queens of ancient times using pawn loans to fight wars and finance voyages, to middle class merchants and hard working people in need of instant cash, and now well.. you need cash.

Pawn Shops have always been around because they help when you need it, and fast. Interest is charged no doubt, but when the going gets tuff, people go to a pawn shop. Yes, over time the reputation of pawn shops has gone from good to bad, and bad to good, vise versa, up and down, on and on.. but it’s usually due to what’s going on in the economy and who’s in charge.

If you’re still reading this you probably need money fast. You should weigh all of your options and know that pawn loans can be beneficial if you know how they work. When comparing interest rates to all available loan choices, consumers should note these three major sources of fast cash loans.

1)Credit Cards

2) High Interest Personal Loans

3) And Secured Loans

Ok “smarttie” pants, you already know that to get a pawn loan you need to leave collateral since you checked out our Pawn FAQ; Pawn shop loans fall in to the Secured Loans category. But you probably haven’t compared all short term loan options. So Now.. let’s compare..

Interest rates on credit cards and other personal bank loans range from 0-24% APR on average, depending on your credit rating. If you don’t have good credit then getting a credit card can be difficult and you are likely to get a high interest credit card offer when you apply. It could take several days to gain access to that money. Traditionally this is the preferred method of credit for consumers because your good spending habits (and bad ones) get reported to credit bureaus. No collateral required, just a promise to pay.

Next is high interest personal loans from non-traditional lenders like payday lenders and car title loans. Car title loans range from 100-300% APR, that’s 8-25% per month and they lend you 20-30% of your car’s value. Even worse, payday lenders charge a 300-400% APR. That’s 25-33% per month, and when it comes to collecting, that’s usually in two weeks time.

To qualify for these types of loans you need proof of income or a car that is paid for, and when it comes time to pay back the loan they display aggressive collections tactics, including using post dated checks to collect your bank account information to make automatic withdrawals of from your bank, and annoying collection phone calls if you don’t pay back. Additionally, they usually only lend you $250, and you can’t get multiple loans unless you are all paid-up from the prior week(s).

Pawn shops are great because they lend you about half of your item’s value, sometimes more.

Loan Type

And pawn loans are non-recourse, meaning if you don’t payback the loan there is no collections activity and you don’t get dinged on your credit report.

Easy Loans To Get

No credit check is required to get a pawn loan and a social security number isn’t either, unless you say you are an active duty military member, or dependent of, then they may ask for your social to verify MLA benefits, but the good thing is you’re interest rate should be capped at 36% APR including fees, for the same instant non-recourse loan, and other benefits could apply so ask if you are an active-duty military member or a dependent of one.

So what's the verdict?

It’s pretty darn clear, good credit loans like low interest credit cards and personal bank loans are how most people prefer to borrow money, and they should, since these type of loans carry the lowest interest rates. But if these loan options are out of reach for you, you should consider pawning something of value before a payday loan or car-title loan. In many cases, the interest pawn shops charge is comparable to that of charges on high interest credit cards. And when matched against a car title or a payday loan, pawn shops simply rock them!