Pawn Loans - Monte de Piedad

Need cash?

For your finances, for a personal project or capital for an investment.

Whatever the reason, local pawnshops are the best option.

How do pawnshop loans work?

A pawnshop loan works similarly to a standard loan. The borrower comes to the pawnbroker to borrow funds.

The lender calculates the risk involved and then draws up a contract on the terms of the transaction. The funds are then transferred to the borrower and the borrower must comply with the conditions set out in the contract.

However, there are significant differences. Instead of accepting monthly payments and demonstrating that these payments are within their means, the borrower will simply offer an item as collateral. The lender will then deliver the required cash to the borrower, which will be calculated as a percentage of the total value of the item.

This means that the borrower walks away from the lenders with two things. First, they have the full cash value of the loan on hand. Second, they have a pawn ticket. This pawn ticket can be redeemed in exchange for the item when the loan is repaid.

Alternatively, if you no longer want the item, you can simply leave it with the pawnshops and keep the cash.

No credit checks or joint signatures are required, as the pawnbroker already has the collateral they need to secure the loan.

However, some additional checks are required. Pawnshops operate in a highly regulated industry, which provides peace of mind to the borrower but also requires verification of the item being pledged as collateral. This could involve the presentation of proof of purchase documents, as well as a brief interview about the item’s history.

Why are pawnshop loans such a good idea?

Now that we understand the mechanics of a pawn shop loan, it’s time to consider why this method of receiving credit is such a good idea. Most of us are already familiar with this type of loan, but many of us may not have really recognized the advantages of working with a pawnbroker.

It’s time to find out what kind of benefits you can expect and understand why you should consider a pawn shop loan whenever you need fast cash.

Effective, fast and uncomplicated

Nobody wants to have to jump through hoops to get a loan. No one wants to have to wait a long time to get their money. Pawn shop loans provide the answer. Simply work out a deal with the pawnbroker, pledge your item as collateral, agree to the terms and get your money today.

This results in an optimized cash flow that you can truly rely on. Whether you have bills to pay, need to raise money for a personal project or investment, or have another urgent problem that requires fast cash, pawnshops can take care of this for you.

Of course, there are other options available for quick cash. These include payday lenders and title lenders. However, it can be risky to deal with these lenders and could leave you out of money in the long run.

Contained risk

Risk is always a factor when it comes to borrowing money. What if you can’t pay the money back? What if your circumstances change? These questions are a constant source of anxiety for many people seeking access to quick cash.

With a pawn shop loan, there is no such anxiety. Any risk is contained and limited to the value of the item being offered as collateral.

Whether you are looking to pawn jewelry or a watch, or perhaps some designer accessories that have been worn, loved and are still in good condition, the value of the loan is based solely on this value.

This means that if you are unable to repay the loan, or if you decide to simply turn the item over to the pawn shop and keep the money, the transaction is complete.

There are no additional costs to worry about and there is no legal obligation to repay the loan.

No harassment by debt collectors

When borrowing from a traditional lender, there is a well-defined process if the borrower is unable to repay. First, polite requests are sent to the borrower, reminding them that the money is owed. Then, the debt is transferred to a collection agency that may use more aggressive methods to recover the borrowed money.

While customers are afforded some degree of legal protection, dealing with debt collectors can be a troubling experience.

Agents can visit your property and take valuable items that can be auctioned off to pay off the loan, in addition to bombarding you with letters, phone calls and legally mandated visits. All things considered, this can make life a misery for anyone in trouble with debt collectors, even if your situation has arisen through no fault of your own.

For millions of Americans each year, pawnshops represent a refreshing alternative, without the hassles or worries associated with other forms of indebtedness.

No damage to credit score

Failure to keep up with monthly payments can cause more problems for borrowers than loss of property and harassment from collection agencies. In fact, it can severely inhibit your life for many years.

Defaulting on loans and missing payment schedules will damage your credit rating, making it difficult to obtain credit and loan facilities in the future.

This means that a simple misunderstanding over a small personal loan can prevent you from getting the dream home or car you need, even several years or more after the event.

This is not the case with a pawn shop loan. Since the collateral for the loan is provided up front, there is no risk of damage to your credit rating. This means you can sleep easy knowing that, whatever happens, there are no long-term negative implications for today’s financial decisions.

Suddenly, the path to financial solvency becomes much clearer. You are free to make the investments you want to make today without damaging your credit score. You are free to pay off your personal debts and properly manage your finances without worrying about ruining your future. You are free to achieve the kind of cash flow you want, without the stress and anxieties of seeking a more traditional loan. All of this comes from working with the right pawn shop loan provider.

No damage to credit score

Defaulting on loans and missing payment schedules will damage your credit rating, making it difficult to obtain credit and loan facilities in the future.

This means that a simple misunderstanding over a small personal loan can prevent you from getting the dream home or car you need, even several years or more after the event.

Potentially cheaper than other alternatives

In many cases, a loan from a pawnshop will not be significantly cheaper than obtaining a loan by other methods. However, once all factors are taken into account, the total savings can be enormous.

If your loan is transferred to a collection agency, this costs money and adds a lot of money to the total repayable value of the loan. This is not a concern for pawn shop loan customers.

If you miss a payment on your traditional loan, you will incur a penalty, which over time can add up to a significant amount.

Again, this is not a concern for anyone getting a pawn shop loan.

If you fall into the domino effect of bad credit, with late payments piling up and creating an unmanageable situation, the potential costs can be enormous. Pawn shop loans are not connected to this system and therefore will not contribute to this cost. In fact, the money you receive could put an end to this chain reaction once and for all.

It is vital to look at the bigger picture when seeking credit. Opting for this type of loan can save you a lot of money in the long run.

Easier to insure

Pawn shop loans are completely separate from credit scores and credit ratings. We’ve already seen what that means for you down the road, but what about acquiring the loan in the first place? After all, most lenders won’t work with candidates with low credit scores.

Bad credit is a counterproductive cycle. You need an infusion of cash to balance your finances, but you can’t get it because your credit history is poor. This only leads to more defaults and a worsening credit history.

With a pawnshop loan, credit history is not taken into account. A contract is drawn up based on the value of the object put up as collateral, and this is the only confirmation the pawnbroker needs. All money lent is secured against this item and, once the ownership and legitimacy of the item is verified beyond doubt, no further questions are asked regarding credit.

This makes a pawn shop loan an excellent means of breaking the ugly cycle of bad credit. It reintroduces some control, stability and solvency into your life and finances.

Esto hace que un préstamo de casa de empeño sea un medio excelente para romper el feo ciclo del mal crédito. Reintroduce un poco de control, estabilidad y solvencia en tu vida y en tus finanzas.

Why do people often go to a pawnshop for a loan?

There is no “typical case study” for a pawnshop loan. In fact, the factors that drive pawnshop loan customers and the personal circumstances that bring them to a pawnshop in the first place are as diverse as the customers themselves.

Below, we describe some of the common reasons that lead people to seek a pawnshop loan.

Paying off existing debts: Debts have a habit of getting out of control and can cause serious monetary problems for individuals and families. Since there is no additional risk involved in a pawnshop loan, the quick cash received represents a safe method to pay off these debts and regain control of your finances.
An emergency cash injection: Unfortunately, there are times in life when you need cash and you need it fast. If your rent is due, if you’ve had to pay unexpected medical bills, or if you suddenly need cash for another reason, there are few easier ways to quickly connect with this than through a pawn shop.
Fund a personal project: Life is all about creativity and ambition. If you have valuables at home, you may decide to put them towards a good cause by using them as collateral at pawnshops. This gives you the money you need to get your project off the ground.
Financing an investment: Finding a great investment opportunity and then discovering that you don’t have the extra money needed to finance that investment is a frustrating experience. A pawn shop loan offers a quick solution, with potentially huge returns.
Home renovation work: Home renovation projects can be a great way to finance a home renovation project.