At some point in time, everyone faces unexpected expenses. When that happens, there are several options available to cover those expenses.
Often depicted as seedy and unethical, pawn shops are actually the opposite. They are subject to numerous state and federal laws and closely monitored. Further, the National Pawnbrokers Association maintains a strict Code of Ethics its members must follow. Created about 3,000 years ago in China, working with a pawn shop is quite simple. A customer brings an item or items, and the pawnbroker offers a loan on that item with a certain term of repayment. The terms depend on the amount of the loan and other variables. The pawnbroker keeps the item as collateral to secure repayment. The customer can repay the loan and reclaim the property, or not repay and let the shop keep it. There is no penalty. Sometimes a pawnshop will buy property, but the strong preference is to make the short-term loan. Often the terms of the loan can be renegotiated for a longer term for an additional fee.
For those who don’t own—or don’t want to part with—the type of items that would interest a pawn shop, there is also the personal sale alternative. There are consignment shops you can use to sell clothing, furniture, and antiques on a commission basis. If the goods don’t sell or don’t meet the seller’s required minimum, they are returned to the owner. The tag sale is also a good alternative. It is offered in many different forms; garage sale, rummage sale, flea market… but the object is always the same: sell items you no longer need or want in order to earn money. Local communities often have restrictions that apply to how the sale items can be displayed, for how long, etc., so be certain to understand any and all regulations. Websites like Realsimple.com offer tips to have the best chance of success. One final piece of advice, if you think some items might be worth more than a couple of dollars, have them appraised first.
Another alternative is the short-term loan. Short-term loans differ from mortgages and traditional long-term loans in several ways. First, there is no collateral. The borrower does not have to put up any type of collateral to qualify for the loan. Second, most short-term loans have less stringent credit requirements, although in turn that does significantly increase the amount of interest rate charged. Third, there is a very quick turn-around, often in as little as 48 hours. This type of loan should be used for emergencies only. All short-term loan providers are subject to many federal and local regulations. As with any industry, it is important to investigate different lenders to see how they work and the benefits they offer. An important consideration is whether or not they offer flexibility in case there is a problem like repaying the loan in the original time frame. Learn more at www.MoneyBoat.co.UK