The thing with having to deal with bills and limited funds is that it makes us – even the most prudent ones – desperate to get their breath off our necks. And sometimes, that includes looking around the room for things to sell. It could be that old pair of earrings from your mother, or that dusty audio system sitting in the corner, or even the outdated phone sleeping in your drawer – it could be anything! Because, at this point, we’re desperate.
But before you pick up those items and hand them over to the nearest pawn shop, here are some reasons why getting a loan might be a better idea.
I Want it Back.” – Keep What’s Yours
That’s the thing about pawn shops: sometimes you don’t get your stuff back, which is a bummer. You’re just using your wedding ring as security for a loan when you pawn it. Not a problem, right?
Nope, it is. Because if you can’t pay back the loan and interest on time, the pawn shop may be able to sell your item.
2. The Numbers Don’t Lie: Loans Can Be Cheaper
Just so you know, you might want to keep an eye on how pawn shops make money. Interest rates and fees are usually pretty high, so it’s something to think about. You will get your money right away, but you will have to pay a lot to get your stuff back. These fees can add up to a lot more than the loan the pawn shop gave you, and you might not even be aware of it.
You might think, “Hey, I’ll just pawn my game console, it won’t hurt.” And do you know what? Although it’s worth $500, you only get $150 for it. Oh no, right? So, if the monthly interest rate is 20%, which is pretty normal, you’ll have to pay $180 over the course of the loan just to break even. It will cost you an extra $30.
You might want to talk to a standard loan or a Singapore online money lender instead. They might be able to give you a better price deal, even if it means you’ll have to pay it back over a longer time.
3. Build Your Credit, Not More Stress
Your credit score won’t change much if you sell your things, which is a shame. Not paying a pawn won’t hurt your credit score because credit bureaus don’t see it. Yes, it’s a dead end when it comes to money.
But, if you always pay your loans back on time, some kinds of loans can really help you build a good credit history. We know it’s not fun to talk about credit scores, but trust us, it will pay off in the long run if you keep them in good shape. It can help you get better interest rates on loans and mortgages, and it might even help you get that fancy apartment you’ve been eyeing.
4. “But I Need Cash NOW!” – Exploring Loan Options
We totally get it. Sometimes you need to speed things up. Just so you know, pawn places aren’t the only choice anymore. Let us suggest some other choices for you:
Short-term loans
There are a lot of online lenders who can quickly give you money for small amounts of time. It’s important to shop around and compare prices, but these choices may be better than the pawn shop.
Credit unions
Most of the time, credit unions offer better interest rates on personal loans than banks do if you are a member.
Payday advance apps
There are also payday advance apps, but watch out for those sneaky fees! These can be very helpful when you’re in a jam. Their help can give you extra money until your next paycheck.
5. When Pawn Shops Might Be Okay
We’re not saying that pawn shops are bad places or anything. They’re not that bad, really, at times when you’re sure you don’t want the item back.
Oh, that old guitar might just be sitting there collecting dust. You think it’s more cool to sell it at a pawn shop than to throw it away. Or, if needs outweigh the cost because as annoying as interest rates can be, it’s always good to have cash on hand in case of emergency.
Conclusion
Thinking about selling your stuff? It’s more of a last-ditch effort, remember? Somewhat of a quick fix for now.
Before you leave with those valuables, why not look into other loan options? You may be able to save money, keep your valuables safe, and improve your finances in the long run. Hope it helps!
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