[youtube_sc url=”https://www.youtube.com/watch?v=uS2irmVI6qg”]
The other day I was talking to a few people about what I do for a living, that I’m a pawn broker. I was telling them how the business works, that our main focus is loans, etc. One of the guys I was talking to asked, well why would people go to a pawn shop to get a loan when they could go to a bank? He had an inflection in his voice as if to say, this doesn’t make any sense, why would any one pay 5, 10, 20 percent interest a month when banks are lending 3, 4, 5 percent per year? He didn’t get it. So I started to explain to him the reasons why someone might pick a pawn shop Boca Raton rather than go to a bank, and it made me think a lot of people probably think just like this guy. He’s thinking, what kind of idiot would spend so much in interest to get a loan? They must be so desperate for cash they have nowhere else to turn. Well, that’s not necessarily true.
There are three reasons why getting a loan at a pawn shop is better than going to a bank. The first reason is speed. When you’re in a bind and you need fast cash a pawn shop is the best option. Getting a pawn loan can literally take 5 minutes or less and you have cash in your hand. Imagine going to a bank and getting a loan the same day! Let alone 5 minutes. If you need a business loan or mortgage from a bank, it usually takes weeks. And you might say, OK well you shouldn’t let yourself get that far down that you need cash in 5 minutes. But you never know what you need money for. Sometimes I have clients who need cash quick because their other money is tied up in investments, and they need to make a down payment for something. There is a huge advantage to being able to lend money fast.
The second reason someone might choose to get a loan at a pawn shop is it’s under the radar. Pawn shops don’t check credit, loans don’t get reported to credit agencies, and pawn loans are discreet. You might have bad credit and a bank won’t lend to you, or you don’t want to hurt your credit by opening a loan. Literally no one has to know you have a pawn loan except for the people who work there. Some people don’t want their every move recorded and like to deal in cash. Getting a discreet loan a pawn shop is a great option for them.
The last reason a pawn loan is advantageous is something that might surprise you. It’s not “as” expensive as you might think. I say as because of course a pawn loan is more expensive than a traditional loan, but it’s really not as bad as you think. In this day and age there are so many pawn shops which creates huge competition. This is great for the consumer. In the state of FL where my pawn shop is located, you can legally charge up to 25% interest every 30 days. That’s a huge number right? But if I actually tried charging that kind of interest I’d get no business. With all the competition out there interest rates are super low. We’ve even run promotions charging 0% interest! So before you decide a pawn loan isn’t for you consider the pro’s and cons, you might be surprised to find you can get a great deal.