Bad things happen--often when you're flat broke. How can you get some quick cash to pay your overdue rent, get your car repaired, or pay for some emergency dental work?
You can get a short term loan at a pawn shop if you have an item of value that they can hold as collateral. These items include possessions such as jewelry, electronics, or musical instruments.
When you bring an item into a pawn shop, they will assess the value of the item and offer a loan for a small percentage of that value. They will keep the item at the pawn shop until you return by a specific date to repay the loan and pay an additional fee.
If you do not repay the loan within the prescribed time, the shop will be allowed to keep the item. However, many pawn shops are flexible, and will allow the customer additional time to repay, with an additional fee, to avoid losing their personal possession.
If you choose, you can sell the item outright at the pawn shop, but you will receive a smaller amount than you might receive from a private sale. Of course, you will receive the cash immediately and won't need to repay a loan. If it's an item that has no sentimental value and is no longer used, an outright sale may be your best bet.
This type of loan is based on your ability to repay the loan within one week, or until your next payday. There is no credit check for this type of loan. All you need is proof of your weekly income, such as a check stub, and a valid checking account.
The checking account will be used to deposit the loan proceeds, and to withdraw the loan amount plus a lender's fee upon the date of the borrower's next payday.
This type of loan carries a high risk of default, so the lender must charge a substantial fee to cover losses incurred when some borrowers cannot pay back their loans.
Because of the high fees involved, borrowers should use payday loans with discretion. May payday lenders will allow borrowers to "roll over" their loans, or extend them for an additional week, to allow the borrowers to find a way to compensate for the loss of a week's pay.
However, when the loans are extended, lenders are forced to charge an additional fee, which further increases the borrower's debt.
This type of loan is invaluable in an emergency when a borrower has nowhere else to turn, but shouldn't be used for frivolous or non-essential needs.
For payday loans, contact a company such as EZ Money.