5 Things to Consider Before Applying for a Pawn Loan

By April 8, 2020 August 5th, 2020 Pawn Loan

Sometimes you need money fast but your current circumstances mean you’re not eligible to apply for a loan with one of the banks. Or maybe your chances of getting a loan application approved are slim? If you’re in this position due to debt, unemployment or a poor credit score, you’ll need to search for other finance options.

You could try and borrow money from someone you know, or you could go for a Pawn Loan from an independent Pawn Loan provider. Before applying for a Pawn Loan, there are some things you’ll first want to consider, so let’s take a look at them.

1 – Why Choose a Pawn Loan?

The beauty of a Pawn Loan is that your current employment situation and credit history do not factor into the criteria. Another huge advantage is that they can be borrowed against your business assets, like a company car, van, truck or ute. 

This is a secured loan. The chances of having your loan application approved are high, provided the vehicle or other item you leave with the lender is in excellent condition and of sufficient value to cover the amount you wish to borrow.

2 – The Kind of Collateral You’ll Require

A Pawn Loan is a secured type of loan. In other words, you need to offer up an item of value as security to be considered for the loan. Pawn Loans can range from around $2,000 up to $500,000. Understandably, to secure finance in this range you’ll need something more valuable than a $500 TV or golf clubs as collateral.

Here’s a quick list of some items you can use to secure a Pawn Loan:

  • Your car
  • A motorbike
  • A boat or jet-ski 
  • A caravan
  • Expensive jewellery including a luxury watch
  • Business vehicle
  • A truck
  • And more…

3 – Understand the Terms of the Pawn Loan

Just like any form of finance, there will be interest to pay on the loan and a specified period in which the total loan amount (including interest and fees) needs to be paid in full. The terms of lenders will vary a little, so before you decide which is the best Pawn Loan firm for you, make sure you understand exactly what you’re signing up for.

Some questions to answer are:

  • Is there a loan establishment fee?
  • How much is the interest?
  • How long do I get to repay the loan?
  • What happens if I can’t repay the loan in time?

4 – You Could Lose Your Asset if You Don’t Repay the Loan

This point is something to keep firmly in mind before applying for a Pawn Loan. In essence, when you pursue this type of loan, you’re agreeing to receive money in exchange for your asset. If you fail to repay the loan, the lender has the right to keep your asset and sell it to recoup their lost funds.

Pawn Loans are a fantastic option but just be aware of potential risks before committing yourself. If you don’t have the means to pay back a Pawn Loan in the allotted time frame, then you probably shouldn’t risk an asset on this type of loan.

5 – Choose the Right Lender

You’re probably asking yourself, where can I get a Pawn Loan in Sydney?

The simple answer is there are quite a few lenders in Sydney that offer Pawn Loans with very reasonable terms. A search online for Pawn Loan providers in Sydney will produce some options. Note that pawn loans of this nature are only available in Sydney. If you’re not located in Sydney, you’ll need to apply for a personal loan from a private lender.

Always go with a company that has a good track record and some positive testimonials.

Whatever you decide to do, keep in mind the points mentioned in this article and only apply for a Pawn Loan if it’s the right fit for you and your circumstances. Visit Cashify today to find out more about Pawn Loans. 

Disclaimer: Please note this content is of general nature only and does not take into account your personal objectives, financial situations or needs. For advice tailored to your financial situation, it is advised that you seek guidance from an accountant or financial advisor. The information contained in this article is correct at the date of publication.