Many Choosing Pawn Shops Over Banks For Loans

Many Choosing Pawn Shops Over Banks For Loans


Many people who are strapped for cash and are unable to receive a loan from a bank are turning to pawn shops.
The National Pawnbroker Association reports pawn shops are seeing a record number of people pouring into their stores.
The high unemployment rate and ailing economy are most of the reasons for the uptick.
Unlike the bank, customers with less than prefect credit can bring their valuables in and get a small loan without a credit check.
“You don’t have to have a great credit score to come here,” said Sanchez. “They can get a loan on something of value and then pick it up with a small interest fee. Pick it up one week and then do it again next month.”
That is the reason Gerald Parado prefers dealing with pawn shops instead of banks.
“They are just becoming more mainstream because places like this they keep everything nice, the people are nice. It’s not like shady anymore,” said Parado.
Kevin Zeldon, who needed fast cash, said the pawn shops are easier to deal with.
“Here you can negotiate prices they are easy with people you can talk to them better than a bank,” said Zeldon.
The growing number of people heading out to pawn shops has the Better Business Bureau concerned. Erin Dufner with the Better Business Bureau says pawn shops should be a last resort for a loan.
“Really a pawn shop can be a way to get a really quick loan for folks that may have little or no credit but at the end of the day consumers may be paying an upwards of over 200-percent APR and it can be at the end of the day a very expensive loan,” said Dufner.
Another thing Dufner said to keep in mind is to make sure the business is licensed by the Office of Consumer Credit Commissioner and to make sure the agreement is in writing.

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