If you need money quickly and you do not have a credit card or anyone to loan you money, you may be considering a collateral pawn loan. With this type of loan you take something of value, such as jewelry or high-end electronics, to a pawn shop. They take possession of your item and in exchange, they loan you a percentage of the value of the item. If you pay the loan back, you get your item back. If you fail to pay the loan back, the pawn shop owns your item and can sell it to recoup the money they loaned to you. If you have never taken out one of these loans before, you may have many questions. Here are a few of the questions you may have in regards to collateral pawn loans and your credit.
Is Your Credit Checked When You Take Out a Collateral Pawn Loan?
No. When you take out a collateral pawn loan, the pawn company will not check your credit. In most cases, they may not even check your income or whether you have a job. You are putting up collateral in exchange for money, so there is little risk to them. As such, they do not care what your credit score looks like and lend money to those with poor credit every day.
Why is a Collateral Pawn Loan Good for Those With Bad Credit?
If you have bad credit, getting a loan can be challenging, if not impossible. Most lenders look at your credit score as one of the main factors in deciding whether to approve you for a credit card or a loan. If your credit score is low, they will likely turn down your application. But just because you have poor credit does not mean you won't find yourself in a pinch and need money quickly. In this case, you have limited options and a collateral pawn loan is one of them, which is why many with poor or challenged credit utilize this type of loan.
Is Your Credit Affected If You Default on the Pawn Loan?
If something happens and you find yourself unable to pay off the loan for your collateral pawn loan, you do not have to worry about a mark or ding to your credit. Pawn companies do not report these loans to the credit reporting agencies and as such, do not report defaults either.
Collateral pawn loans are one of the best options to get money quickly for those who have bad or challenged credit. If you need money now and have something of value, visit your local pawn shop to take out a collateral pawn loan. You can also visit a website like http://solsjewelryandloan.net/ to learn more.