The Difference Between a Pawn Loan and a Traditional Loan

A collateral loan, or a pawn loan, is simply taking out a loan based on the value of something you own. If you have collateral, that is, something of value, you can use it to access quick cash. To get a traditional loan you have to prove that you have good credit and the means to pay back the loan. You have to go through a bank or other lending institution, filling out long complicated forms. Then you have to wait for the approval process to be complete before ever receiving your cash. Some people are never approved.

The beauty of a pawn loan is that all you need is collateral. There is no credit check. You leave your valuable item with a pawnbroker in return for cash. You get your cash that day. Additionally, unlike with a traditional loan, the cash is yours to use as you like. There are no rules for how you must spend your cash. Furthermore, you have the option of taking out smaller loan amounts with a pawn loan. With a pawn loan, you don’t have to pay the loan back if choose not to, because the loan was secured using your item of value. Unlike traditional bank loans, pawn loans have no impact on your credit. Pawn loans are a simple, effective way to get the quick cash you need.