Unemployed tenants and non-homeowners can find borrowing money extremely difficult if you have poor credit or past defaults. Pawn shop loans can prove very helpful in such situations, especially if you are in a financial emergency. The lender does not require collateral made of bricks-and-mortar. These loans are easy to apply and they don't involve any credit check for approval, another advantage is that you can get the loan in a matter of minutes and is paid in cash. If you need money urgently and the need is temporary then this is an ideal option.
Getting a Loan from a Pawn Shop
- The pawnbroker will take a variety of items as collateral including automobiles, electrical good, life policies, art work, gold, watches and silver. Pawning the item doesn't make you lose ownership of it; the item is safely put away by the pawnbroker till you repay the principal and interest.
- The item to be pawned is assessed for value by a professional; you will receive 30% to 50 % of the items value for an unemployed tenant's loan. This way the interest is also covered by the extra equity which can also be used during an agreement renewal when the term ends.
- Identification proofs are necessary and you will need to supply two such documents.
- You will receive the amount in cash as soon as the agreement is signed.
- When the term ends, you will need to return the total amount owed along with the receipt of payment. The item pawned will be returned to you.
- If you are unable to pay the amount back then the collateral is sold to clear the loan.
What Does a Pawn Shop Loan Costs for Unemployed People?
The rates on such loans vary; typically loans for tenants can collect around 25% interest per month. If you have taken a loan of $500 then to redeem the collateral you need to pay a total amount of $625.
You can renew an agreement at the end of the term depending on the equity. If you are looking for a renewal then talk to the pawnbroker before the redemption date to avoid the chance of the collateral being sold off. You must remember that every month the interest continues to accumulate which will make the outstanding amount higher.
Pros and Cons of Pawn Shop Loans
An unemployed tenant loan is an easy way out of a temporary financial crisis. But the interest on the loan increases monthly, if you are already unable to maintain the monthly budget then it would be wise to figure out how you will pay back the loan in the coming months. So you may in effect end up renewing the agreement again and again. This is how the business of pawnbrokers works. Bad credit tenant loans must be considered only if can repay on time.