As we climb out of a cold winter, everyone’s fighting off the flu. 🤧 If you’re low on cash, why not take your mucus to the pawn shop? We like to call that…hawking a loogie. 🦠💰
All boogers aside, if you need extra money ASAP, you might have kicked around taking out a pawn shop loan. Wondering if it’s the best idea? 🤔 Check out this quick guide before you pull the trigger. ⏬
Here’s Five Fast Facts on pawn shop loans:
- 💍 Lendy Wendy - Pawn shop loans work on collateral, meaning you have to put something up to get cash. The shop decides how much it’s worth and lends you a slice of that value, usually for 30 to 90 days. Pay it back with interest and fees, and you get your item back…otherwise, it stays on their shelf.
- 😇 The Good - For small, short-term cash needs, pawn loans can be an alternative to most costly payday loans. They’re especially useful for people who don’t qualify for regular bank loans. Because most pawn loans are under $200, banks generally don’t offer products that small.
- 😈 The Bad - A pawn loan might solve today’s problem, but it can create tomorrow’s. If you don’t pay it back, your item’s gone. Plus, using these loans over and over can rack up fees and they don’t boost your credit like credit cards and other loans do.
- 👹 The Ugly - The biggest catch with pawn loans is the cost. Even if states cap monthly rates (like 4% in New York or 6% in Ohio), those numbers add up fast when you look at them over a full year. In Georgia, for example, the math can equal a 187.5% annual rate, which is way higher than most credit cards or personal loans.
- 💳 Also On The Menu - Pawn loans skip the credit check, but they’re not your only move. Credit unions sometimes approve personal loans for borrowers with lower credit scores, and options like payday alternative loans often come with rate caps. Secured loans or secured credit cards can also help you access funds and build credit at the same time.
🔥Bottom line: Times are tough out there for us average Joes and Janes. But before you go and hawk grandma’s engagement ring (or a loogie), make sure you review all your options! Curious about what the latest inflation report means for your paycheck? You came to the right place. Take a quick trip over to this article to read all about it.
Have you ever taken out a pawn shop loan?
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