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Three Myths About Using Pawn Shops For Small Loans

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Obtaining a small loan can be essential when you are facing serious financial shortfalls. Unfortunately, traditional lending services may not always be appropriate as they may be unwilling to issue a loan to individuals with poor credit or they may only issue loans that are too large for your purpose. As a result, any individual will find that a pawn shop can be an excellent option for financing.

Myth: You Will Need To Pass A Credit Check To Get A Loan From A Pawn Shop

There is a common idea that a pawn shop will require you to submit to a credit check before issuing you a loan. Unfortunately, this concern can cause some people to avoid considering this option as they will assume they will fail any credit check. Luckily, pawn shops do not typically require a credit check to issue a small loan to clients. This is due to the fact that the amount of the loan is based on the value of the collateral that is given to the pawn shop.

Myth: A Pawn Shop Will Immediately Put Your Collateral For Sale

When obtaining a loan from a pawn shop, it will be necessary to provide collateral to secure the loan. In situations where you fail to repay the loan, the collateral will be listed for sale. Unfortunately, you might be under the impression that these items are immediately placed for sale by the pawn shop. In reality, the pawn shop will clearly outline the terms of the loan in the initial contract, and this will outline the process of forfeiting your collateral. By closely reviewing this section of the contract, you will be better prepared to avoid accidentally forfeiting your collateral.

Myth: You Can Sell Items To A Pawn Shop Anonymously

For those that are wanting to simply sell items to raise money, it is often assumed that this can be done without having to provide identification. However, it is important for pawn shops to be able to track the items that they buy so that records can be submitted to the police if any items have been determined to be stolen. While the exact rules will vary, you will typically need to have a government-issued photo identification card to sell items. Due to variances in the policies of individual pawn shops, you should always call ahead of time to make sure that you have the appropriate documents when you arrive to sell your item.

For more information, call places like Rocky  Mountain Pawn today.