Are you unsure of what to do if you are unable to repay a pawn shop loan? Perhaps you initially didn’t consider things through because you needed the money. People can use pawn loans to borrow money by using their assets as collateral. If you ever find yourself short on cash and have no other options, it is a perfect alternative. If you don’t pay back your pawn loan, this guide will help you understand your choices.
Remember that you can stop by USA Pawn to sell your jewelry and other valuables – or take out a pawn loan.
What can I do if I cannot pay back my pawn shop loan?
You as a borrower have a number of choices for paying back your pawn loan. You have three options: pay back the loan and get your item back, settle the interest and get a fresh 30-day loan, or retain the money by paying nothing back.
If you are unable to repay your loan in full when it’s due, you can at least make interest-only payments to keep it open. Your loan is automatically extended for a further 30 days as a result. For this reason, it is strongly advised that you at the very least pay the interest in addition to the amount you intend to apply to the borrowed sum.
Customers occasionally find themselves unable to repay the loan in full or even the interest. Your item will now belong to the pawn shop if you want to keep the full amount borrowed in this situation. Your stuff will be put up for sale by them.
Pawnbrokers do not want to seize stuff to sell again in their stores. They want to make sure you are a satisfied customer who is inclined to do business with them again. Pawnbrokers are aware that they will only turn a profit once if they sell a pawned item. They can earn more money off that one item, though, if you go back and get your thing and keep using their services.
Your credit will not be hit if you don’t pay your pawn loan
The main thing to know is that because you have put something up as collateral for your pawn loan, if you unable to pay it off by the due date, your credit does not take a hit. Instead, we simply keep the item and you keep the money. It is a no-lose proposition.