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How to Apply for a Collateral Loan?

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Are you thinking about getting a collateral loan?

You might be!

Because a pawn shop loan could be your ultimate savior during times of financial crisis.

How to Get Collateral Loan at Pawn Shop?

Precisely, all you need to do is visit a value pawn shop to get a pawn loan at incredibly low interest rate. Although it might seem like a complicated task, getting a collateral loan from pawn shop is quite easy. Below are some ways how you can get a secured loan even if you have a bad credit report:

  1. Use Your Car as Collateral
  2. Pledge Your House as Collateral
  3. Do You have a Savings Account?
  4. Offer Your Personal Property as Collateral
  5. Use Valuable Jewelry or Watch as Security
  6. Secure the Loan with a Future Paycheck
  7. Business Assets Could be Used as Collateral
  8. Visit a Bank or go for a Pawn Shop
  9. Compare the Deals Being Offered
  10. Apply for a Collateral Loan

1. Use Your Car as Collateral

You can use anything of great value as security to get a secured personal loan. And your car is most likely to top the list of highly valuable items that you can easily pledge as collateral.

The amount of cash you can borrow depends on the value of your car. However, if you have a bad credit score, you might not be able to get 100% of your car’s value.

Also, if you haven’t still paid your car loan, then you can’t use it as security since it’s already serving as collateral for that loan.

2. Pledge Your House as Collateral

Many lenders are willing to offer home equity loans that can help you in a bad financial situation. Which means, by pledging your home as collateral, you can get a pawnshop loan that could be repaid in equal monthly installments.

However, in case you’re unable to repay the amount as per your agreement, the lender has the right of foreclosure. Also, when you’re using your home as collateral, the loan amount you get would be equal to 85% of your home equity.

3. Do You have a Savings Account?

Some banks may agree to accept your savings account as security. However, if you pledge your savings account as collateral, you won’t be able to access it till the loan Is completely paid off.

4. Offer Your Personal Property as Collateral

Anything valuable that you own could be used to get a secured loan, including all sorts of personal properties. Such as:

  • Motorcycles
  • Furniture
  • Watercraft
  • Power tools
  • Collectible coins and currencies
  • Antiques and relics
  • High-end electronics
  • Guns
  • Expensive musical instruments
  • Invaluable smartphones
  • Precious metals and jewels
  • Luxury watches

5. Use Valuable Jewelry or Watch as Security

Are you thinking about taking help from a pawn shop in case of financial distress?

Then you might be able to get a collateral loan against some valuable jewelry pieces or a luxurious watch. Just take your wedding ring to a Beverly Hills pawn shop, or any pawnbroker within your locality, and get a loan based on the market value of your asset. Apart form jewelry, you can also use pawn your inexpensive watch at a Rolex pawn shop.

6. Secure the Loan with a Future Paycheck

Ever hear of a “salary advance loan” or a “cash advance loan”?

A bank may be willing to offer you that by accepting your future paycheck as collateral. Usually, these are short-term loans, and you’d be required to pay back the loan as soon as you receive your next salary check. However, payday loans are often offered by lenders who operate who operate from storefront offices, such as small local pawn shops.

Which is why, whenever you decide to visit a pawn shop for collateral loan, ensure that the concerned business abides by the law.

In other words, only visit a licensed pawnbroker in Los Angeles, or anywhere else. And if the pawn shop doesn’t follow the federal law and the IRS code, or comply with the Truth in Lending Act, don’t settle for any offer they make.

7. Business Assets Could be Used as Collateral

Do you want a loan for your business?

If yes, then using one of your business assets as collateral could be a good idea. For instance, if a client has ordered a large purchase, but your resources are limited, loan some quick cash from a pawn shop or a bank to fulfill the order.

Sounds quite simple, doesn’t it?

8. Visit a Bank or go for a Pawn Shop

Now that you know what items you can use as security to get a collateral loan, it’s time to decide the place you should visit for the task at hand.

You can either visit a bank, go to a value pawn shop, contact a credit union, or choose an online lender to get a loan on urgent basis. Usually, a bank might not be willing to offer you a loan if you have a poor credit check.

To find out whether you qualify for a loan from the bank, contact the bank’s leading department. In case you can’t get a loan from the bank, you’d always have the option of visiting a pawnbroker or going to a credit union.

9. Compare the Deals Being Offered

After you have contacted various financial institutions, it’s time to compare the deals they’re offering.

Look at the terms that different lenders are offering and compare the following:

  • APR or the Annual Percentage Rate.
  • Duration in which the loan can be paid back.
  • Monthly payment amount.
  • Payment penalties in case of paying off the loan earlier than agreed.

10. Apply for a Collateral Loan

Now you know what to do!

Just choose a pawn shop or lender that suits you the best and apply for a collateral loan to make all your worries vanish. However, don’t forget to carefully consider the terms and conditions and thoroughly read the documents before you sign.