February 25, 2015

Pawn Loan vs. Payday Loans

Pawn Loans

A pawnbroker offers a pawn loan based on a percentage of an item's estimated value. The item is held as collateral until the loan is paid back. You only need two things to pawn something at United Pawn:

  1. Proper identification.
  2. An item of value as collateral for the loan.

Payday Loans

A payday loan is a short term loan, generally for a small amount of money, that is due on your next payday. You typically need at least three things to get a payday loan:

  1. Proper identification.
  2. A bank account.
  3. A job.

What happens if you can't pay back your pawn loan?

The item held as collateral for your loan will be forfeited and the pawn shop will sell it in their store. That's it. No harassing telephone calls and no dings to your credit.

What happens if you can't pay back your payday loan?

Payday loans can become an endless cycle of debt. Finance charges of payday loans can equate to an annual percentage rate of almost 400%. If you don't pay back the loan, you will have to renew it for the amount of the original loan plus the amount of interest already charged.

I think we can all agree that getting a pawn loan is easy, safe, convenient and will keep you from getting into an endless cycle of debt.

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