If you are in dire need of cash, you may want to consider your alternatives before heading to a pawnshop. The wise thing to do is to prioritize those options that will pay the lowest interest first.
Alternatives to PawnshopsIt’s not a bad idea to approach your friends and relatives to borrow money. If you have a good enough reason to borrow, you’re friends and relatives may be more than willing to help you out. They’ll probably not accept any interest payments. But just make sure that you pay them as you promised. Or else you’ll get a bad reputation for not keeping the promises you make. You don’t want that.
Another option is to consider other lending institutions. Personal loans offered by banks, credit cooperatives and other government institutions may have favorable loan terms better than what pawnshops have. What you need to do is calculate the interest rate you’re going to pay considering these alternatives. Always remember that your best option is the one that has the lowest interest rate in it.
Tips When Pawning Your ValuablesBut however you might have planned for the future, there are times when pawning will be your only best option. Or if you’re a guy who is still trying to recover from a bad financial mess, you may need to pawn some of your valuables to get the cash you need. Whatever reason you may have, pawning is an option that you should take with careful study.
Before you pawn anything, it’s important that you assess your ability to pay the loan on time. Are you expecting some cash by the time the loan payment falls due? Or do you expect any other sources of fund in the near future? Answering these questions will help you assess whether you can really repay the loan or if you’re just being overly optimistic about it.
If you’re not sure about your cash flow, be cautious about the items you pawn. Consider the very real possibility of not being able to repay the loan on time. Thus, you should only pawn items you are willing to lose. These items should not include things that may have sentimental values such as family heirlooms. Things that you know you can’t replace by buying another one like it shouldn’t be pawned.
Shop Around to Compare PawnshopsAnother important consideration is to make sure you check out all the pawnshops near you to know which one offers the best deal. Pawnshops, of course, compete with each other by offering the cheapest loans they can provide. But if you’re too lazy to check out all your options, the price is yours to pay.
Talking to your friends who have experienced pawning their valuables can also be a source of invaluable insights. They can tell you their honest assessment of how their own experience went. With all these knowledge, you will be able to decide properly if and when pawning will work for you.
Photo Credit: alexkerhead (Creative Commons)