The Differences Between Using A Pawn Shop And A Payday Loan Company For Fast Cash

Need some fast cash before your next pay check

? Besides borrowing from relatives and friends, there are several methods within most communities that offer consumers the ability to access limited amounts of cash very quickly. In this article we will discuss pawn shops and payday loan services which offer these methods for acquiring short-term loans.

First of all, the so-called payday loan service companies are in the business of providing fast loans to consumers with little or no credit checks involved. They simply require access to your checking you can't and verification that you do in fact have employment. With access your checking account you then authorize them to electronically withdraw the loan payment automatically when it was due. Additionally any fees or penalties incurred for late payments will also be withdrawn from your checking account automatically. Since there are no credit checks almost universal approval of loan applications is the norm.

Normally, these fast cash payday loan services will offer unsecured loans for up to $500 at a time for one month. In return, they expect repayment of up to $575. The additional $75 is the interest incurred by the short-term loan. This of course is extremely high interest rates compared to those offered in conventional loans by banking institutions. The differences are that these loans are unsecured, meeting there is no collateral requirements, and there are usually no credit checks involved. Virtually anyone the checking account and a job can receive one of these cash loans instantly.

A pawn shop on the other hand offers quick cash in exchange for some form of merchandise. For example, people take such things as TVs, computers, guns, vehicles, and other electronic items into the pawn shop in exchange these for instant cash. In theory, the pawn shop holds his items for a specified amount of time after providing the cash and at a later date the consumer can return with the cash which was loans plus interest and retrieve the item that was left in pawn.

For example, say take a gun to a pawn shop that has a real value of $500. The pawn shop Main fax only give you $200 for the gun. Think of this only as a loan with the gun used as collateral. The idea is that you will return in a month or whatever specified time was in the agreement with the $200 plus interest and then take your gun back. In truth however, most items lift upon shops are never retrieved. Therefore, make absolutely certain you are willing to live without the item you took to the pawn shop and received only a slight percentage of its value.

by: Leo Kingston

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