For people with bad credit, getting a loan of nearly any size can be a massive headache. About one in 10 people has a FICO® Score below 550, and 23% of people have one or more accounts that currently are with a collection agency. Either of these things could be enough to make it nearly impossible for a person to get a traditional loan, which is especially frustrating when the person inquiring about that loan has a good reason to need the money.
What’s the solution to this problem? There aren’t many, but pawn loans may be the easiest among them. The following is a look at how pawn loans can help people with bad credit in need of loans:
What Constitutes “Bad Credit”?
While different companies generate credit scores based on their own models, FICO offers the model that most lenders use when approving loans. These FICO scores range from 300 to 850, and anything 590 and lower is considered “Poor” credit. For these people, it can be nearly impossible to get improved for loans, and the loans they do get approved for typically come attached to very high interest rates or are for lower amounts of money.
So what is one to do? Pawn loans can be the answer.
Why Are Pawn Loans Ideal for People with Bad Credit?
Unlike a personal loan through a bank, a pawn loan involves no credit check or application process. Put simply, the amount of money a pawn shop like Pacific Beach Pawn & Jewelry can offer is directly correlated to the value of the item(s) you’re willing to pawn.
In a nutshell, there are three major advantages of these types of loans for people with poor credit scores:
#1 There is No Credit Check
This is the most important benefit. No longer will you be subjected to loan offers with criminally-high interest rates. All you have to do is step into the pawn shop with your valuable goods, and we use those to determine the size of the pawn loan. It’s as easy as that
#2 The Cash is Provided Immediately
Banks—even those banks that do provide loans for people with poor credit—often take days or even weeks to approve financing. If you don’t want to wait that long for approval, an immediate cash loan through a pawn shop can provide you with cash instantly.
#3 Failing to Pay Back the Loan Doesn’t Further Impact Your Credit Score
There are no legal consequences for not paying back a pawn loan. You are using your valued items as collateral for the loan, so if you find yourself unable to pay it back in the agreed-to amount of time, all that happens is the pawn shop keeps whatever you pawned. You won’t have to deal with creditors, and your already-low credit score won’t be impacted further.
Visit a Trusted San Diego Pawn Shop
If you are someone with poor credit and are getting frustrated with the terms of the loans being offered to you by banks, consider a pawn loan at Pacific Beach Loan & Jewelry. An immediate cash advance for our San Diego customers is made easy, quick, and with no further credit consequences. It is truly among the best options available to those with lower credit scores.