There are many pawn shops where you can easily find cash against valuables. However, before you use the service of any such shop, it would be wise for you to know and be aware of the pros and cons of using pawn shops. You might change your idea about pawn shops, once you read the article. It is important for you to see what pawn shops really are.
The Pros of Pawn Shops
There are a whole lot of people who are aware of the pros of pawn shops and are using this service. The first good thing about pawn shops is that they do not go for extensive credit checking. This is because they would be having a valuable item in their possession anyway, and if you don't return the money, they get to keep the item, which is, priced higher than the loan amount.
The second advantage of pawn shops would be that they disburse the money really quick. In most of the cases, the money is handed over to you or your account the moment you place the valuable on their desk or sign the contract. Lastly, there is no pre-payment penalty which means you can get your item back as soon as you want, by repaying the loan.
The interest charges you would pay will be calculated only for the time you actually borrowed the money for. With many other loans, you can not payback as soon as you want and multiple times, you need to pay extra to repay quicker! That is certainly not the case with pawn shops.
The Cons of Pawn Shops
There are a number of disadvantages of using pawn shops as well. The first and the last negative about pawn shops would be the rate of interest is really high, compared to banks and other financial institutes. The pawnbrokers are free to ask for any interest rate they want.
Another disadvantage of pawn shops, which many people are not really aware of, is that you can only borrow a percentage of the perceived value of the valuable you are pawning. This means you have to place a very valuable item for pawning if you wish borrow a substantial amount of money.
Keeping these factors in mind, you can find decent pawn shops in London who have a transparent and ethical business model. Judge their reputation before using their service.
The Pros of Pawn Shops
There are a whole lot of people who are aware of the pros of pawn shops and are using this service. The first good thing about pawn shops is that they do not go for extensive credit checking. This is because they would be having a valuable item in their possession anyway, and if you don't return the money, they get to keep the item, which is, priced higher than the loan amount.
The second advantage of pawn shops would be that they disburse the money really quick. In most of the cases, the money is handed over to you or your account the moment you place the valuable on their desk or sign the contract. Lastly, there is no pre-payment penalty which means you can get your item back as soon as you want, by repaying the loan.
The interest charges you would pay will be calculated only for the time you actually borrowed the money for. With many other loans, you can not payback as soon as you want and multiple times, you need to pay extra to repay quicker! That is certainly not the case with pawn shops.
The Cons of Pawn Shops
There are a number of disadvantages of using pawn shops as well. The first and the last negative about pawn shops would be the rate of interest is really high, compared to banks and other financial institutes. The pawnbrokers are free to ask for any interest rate they want.
Another disadvantage of pawn shops, which many people are not really aware of, is that you can only borrow a percentage of the perceived value of the valuable you are pawning. This means you have to place a very valuable item for pawning if you wish borrow a substantial amount of money.
Keeping these factors in mind, you can find decent pawn shops in London who have a transparent and ethical business model. Judge their reputation before using their service.
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