Is A Pawn Shop A Better Option Than A Small Loan?

You have a lot of choices when it comes to finding a pawn shop in Freehold, just as you have a lot of choices when it comes to looking for a loan. In the case of smaller loans, and a situation where you have something of equal value that you absolutely don’t need for the interim, you may be wondering if going to a pawn shop is going to result in less nonsense to deal with than that of getting a loan.

But, before you immediately run off with your piece of electronics, furniture or instrument to a pawn shop in Brick, let’s discuss what the differences are between these businesses, and the advantages and disadvantages of either. A spoiler is that, yes, the ultimate conclusion is that in many cases, if a pawn shop can provide you with the funds, you choose that over alone, but that’s a general piece of advice. Your personal situation is yours, and I can’t know what it might be, or what factors may make that a wholly wrong piece of advice for you. Thus, let’s do a little look at these two types of businesses, and perhaps that will give you the information you need to make an appropriate decision based on your personal scenario. Here we go!

Loan Providers

Let’s talk about loan providers first, and how they make their money. This includes banks, who make almost all of their money from mortgage payments and loans. A loan company as an incentive to loan larger amounts of money, their profits coming from interest on top of the loan being paid back, as well as an incentive for some mildly fees here and there.

Loan companies, at least ones worth going to, tend to require either a credit check, collateral, or some other proof that you are eligible to pay it back. If you default on a loan, they are not going to make their money back, no matter what legal ramifications may befall you or your credit score at that point. Banks are FDIC insured, and have less concern there, but they are the strictest providers of all, and kind of understandably so.

Pawn Shops

Pawn shops are a little different. A pawn shop pays less for an object then they intend to sell it for. It doesn’t matter what pawn shop it is, how honest they may be, etc. Their profit comes from people who don’t pay the money back to get their item, giving them things to sell to people. Thus, it’s only profitable if they sell it for more than they paid for it.

Thus, as long as you have the item, they don’t care who you are, they will buy it from you if you agree to the price for it. However, they tend to give you a shorter timeframe to pay back the money, before you forfeit your item. Loans tend to have pre-set pay periods that are admittedly more extensive, because then they get more interest payments. A pawn shop, depending on the thing in the shop, tends to give you a time that can be counted in weeks or less.

So, if you go to a pawn shop Brick, hoping that you can get your item back, expect have to pay that money back a lot more quickly than you would with a loan provider. However, a pawn shop Freehold will not charge you much if any interest paying it back, and many of them, if you are willing to accept a slight interest payment, are willing to give you payment plans to get it back.