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Better Than Payday Loans-If you’re in the market for a short term cash loan and are thinking about using a payday lender, we have a question for you: Have you considered a pawn loan? If not, you’re missing out on what could be a safer, more cost-effective option. Here are four reasons why pawning is the smarter choice.

Simple Terms

better-than-payday-loansPayday loans can involve a bunch of paperwork full of terms and conditions. And there can be some nasty stuff tucked away in the fine print, including an agreement to have your wages garnished and forfeiting the right to take the lender to court. Pawn loan terms, on the other hand, are straightforward, with no hidden fees or penalties.

Save Money

Payday loan interest rates can be exorbitant. In fact, Consumer Protection Ontario called payday loans the most expensive consumer loan in their province. Plus, payday loans often include substantial origination fees, bounced check fees, and other charges. For instance, here in British Columbia, if you make a late payment, payday lenders are allowed to slap an additional 30% interest rate on your outstanding balance. Add it all up and a tiny loan can wind up costing you big.

At Common Exchange, our pawn loans rates are reasonable: we charge a one-time $2 storage fee and then 10% interest* every 30 days. You can pay off your loan at any time and there are never pre-payment penalties. That’s it!

Maintain Your Credit

When you accept a payday loan, you’re being extending credit based on a future promise to pay. That means it’s a transaction, like a mortgage or credit card, that will be reported to the major credit bureaus. That also means they’ll be keeping tabs on what happens, waiting to pounce if things don’t go just the way the lender wants them to.

Pawn loans, on the other hand, are fully secured by your item of value. In other words, you’ve already “paid” for the loan up front, you just also have the option to pay back the balance and reclaim your item. However you choose to satisfy your loan, the credit reporting agencies are kept out of it. That means you get to maintain your privacy and your credit score.

Limit Your Risk

No one can predict the future, so it’s always wise to protect yourself in the event that unforeseen circumstances prevent you from paying off your loan. If you’ve borrowed money from a payday lender, not only will failure to satisfy the terms be expensive, you’ll likely be permanently blacklisted from using their services, start receiving calls from bill collectors, and even be dragged into court by the lender’s attorneys.

With pawn loans, on the other hand, the worst case scenario is that we keep your item while you keep the cash. Your loan is completely satisfied and you’re still a valued customer who we look forward to serving in the future. End of story.

If you’d like to learn more about whether a pawn loan is right for you, get in touch with us at any of our 8 B.C. locations.

* Interests rates may vary by location.