When you need money quickly, you can often forget to take a minute to decide on the best type of loan for you.
In Bournemouth, there are many options to chose from, including traditional loans from banks and pawnshop loans. Ever wondered what the difference between the two are? Why might a pawnshop loan be the better choice?
According to the chief executive of the National Pawnbrokers' Association, 4% of UK households use pawnshops. That might not sound like a lot but it shows that many people find it helpful to get loans in Bournemouth from pawnshops when they need cash fast.
What is a Pawnshop Loan?
A pawnshop loan is a type of loan where you use something valuable that you own, like a piece of jewellery, a watch, or an electronic device, as collateral. Collateral is just a fancy word for something the pawnshop holds onto while you borrow money. If you can’t repay the loan, the pawnshop keeps the item and sells it to cover the loan amount.
In contrast, a traditional loan usually comes from a bank. Banks lend you money based on your credit score, income, and other financial factors. You then pay the money back over time, with interest. A survey carried out by Sara Davies and Andrea Finney of the University of Bristol found that over 76% of people who use pawnshops are very satisfied with their experience. They appreciate the quick access to cash and the simplicity of the process.
Why Choose a Pawnshop Loan in Bournemouth?
There are several reasons why people in Bournemouth might choose a pawnshop loan over a traditional loan. Let’s explore some of the benefits.
- No Credit Check Needed
One of the biggest advantages of a pawn shop loan is that it doesn’t require a credit check. This means that even if you have a low credit score or no credit history at all, you can still get a loan. For example, if you’re a student or someone who’s just started working, you might not have a strong credit history yet. A traditional bank might turn you down for a loan, but a pawnshop won’t because they’re lending based on the value of your item, not your credit score.
- Quick Access to Cash
Sometimes, you need money fast. Maybe you have an unexpected bill, or your car needs repairs. Getting a traditional loan can take time. Sometimes days or even weeks, as banks check your credit, verify your income and go through all the paperwork. A pawnshop loan, on the other hand, is much quicker. You can often walk into a pawnshop, have your item evaluated, and walk out with cash in just a few minutes. In Bournemouth, a desirable South Coast resort, where the cost of living can be high, this speed can be a lifesaver.
- No Long-Term Debt
Traditional loans often involve long-term commitments. You might have to pay back the money over several years, and if you miss payments, your credit score can suffer. With a pawnshop loan, the terms are usually much shorter, often just a few months. If you pay back the loan, you get your item back, and that’s the end of it. If you can’t repay, the pawnshop simply keeps the item. There’s no impact on your credit score, and you’re not stuck with long-term debt.
- Lower Risk
When you take out a traditional loan, especially a big one like a mortgage or a car loan, you’re taking on a lot of risk. If you can’t make the payments, you could lose your home or your car, and your credit score could take a big hit. With a pawnshop loan, the only thing at risk is the item you pawned. If you can’t pay back the loan, you lose the item, but your credit score stays safe, and you’re not in debt.
- Flexible Loan Amounts
In a pawnshop, the amount you can borrow depends on the value of the item you bring in. This means you can get a loan for a small amount, like £50, or a larger amount, depending on what you’re pawning. Traditional loans often have minimum amounts that might be more than you need, forcing you to borrow more than necessary. In Bournemouth, where people have different needs, this flexibility is a big plus.
- Confidentiality and Privacy
When you apply for a traditional loan, you have to provide a lot of personal information, like your income, employment status, and credit history. This information is shared with the bank and sometimes with other financial institutions. With a pawnshop loan, the process is much more private. The pawnshop only cares about the value of your item, so there’s no need to share your personal financial details.
Choose Bournemouth Pawn for Quick Loans As and When Needed
Choosing a pawnshop loan in Bournemouth over a traditional loan offers many benefits. Whether it’s the quick access to cash, the lack of a credit check, or the lower risk involved, a pawnshop loan can be a smart choice when you need money fast. Bournemouth Pawn is run by a local family and is a buy-back store in the simplest of terms. You can apply for a variety of flexible loans with us, ranging from a few days to a year as well. If you ever find yourself in a tight spot, remember that pawnshops in Bournemouth are here to help, offering a simple, flexible, and confidential way to get all the cash you need without going through the hassle of a traditional loan.
