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SHORT ON CASH?
Kids need Halloween costumes. Trick or Treaters want
treats. The Thanksgiving feast has to be bought.
Christmas and Hanukkah are coming! The cost of groceries
and gasoline seem to be skyrocketing!
It seems that this time of year one expense after
another is clamoring for your dollars. Since some of us
may be a little short of cash, following is one
alternative to getting some extra money quickly and one
alternative to avoid at all costs!
I will be back in a few days with other suggestions to
help you earn the cash you need now. In the meantime,
please beware of predatory lenders. There are other ways
to get extra cash in a hurry.
PAWN SHOPS
Pawn shops, for the most part, are no longer the sleazy
stores that deal in stolen merchandise as once portrayed
in movies. Many are now more like retail stores and
some, such as Cash America, EZ Pawn and First Cash, have
publicly traded stock.
If you need a quick loan for a few hundred dollars or
less, in my opinion, a pawn shop is the way to go. Pawn
shops loan on almost anything of value: jewelry,
watches, guns, tools, musical instruments, sporting
goods, CDs, DVDs, stereos, microwaves, TV’s, silverware,
etc. Some items will not be accepted for pawn and some
pawn shops may have too many of the item you want to
pawn, so you should call before loading up a 60-inch TV
and driving to the pawn shop, only to find they don’t
want it. Also, make sure you take all the parts of the
item with you: remote, speaker wires, operating
instructions and original box, if you have them. The
items should be clean and in working condition!
HINT: Do not expect to get a $500.00 loan on an item you
paid $1,000.00 for. Loans are usually around 10% of the
retail cost of an item. If you have several items to
pawn, such as a watch, a camera and a drill, try to do
separate loans. That way, if dh needs his drill, you can
get it out of pawn without having to get all the other
items out at the same time.
There is no credit check involved in making a pawn loan.
A loan you default on is not reported to any credit
agencies. The only consequence you suffer if you don’t
pay back the loan, is you lose the items you pawned.
Once you have defaulted on your loan these items become
the property of the pawn shop and they can sell the
items for any price they set. Interest is very high
–about $20.00 per month on a $100 loan, which is 240%
APR. Once a transaction is completed, even if you come
back in an hour to retrieve your item, you will be
charged interest.
HINT: Pawn shops make the majority of their money on the
interest you pay, not on the items sold. Even if you do
not plan on paying off your loan, do not outright sell
your item to them. You can usually obtain more cash by
getting a loan. Pawn shops do not care how many loans
you default on. You can default on one loan and take
another item in to pawn the same day.
Do ask as many questions as you need and be absolutely
sure that you understand all the terms and conditions of
the pawn loan. For more information, go to
http://www.occc.state.tx.us/pages/brochures/sold_gold_en.html
HINT: You may also want to do some shopping in pawn
shops. You can get some great deals! Just know your
merchandise. Sometimes items might be priced higher than
what you would pay for brand new. Some pawn shops also
carry a small amount of brand new merchandise.
PAYDAY LOANS
These are the loans you want to Avoid at All Costs! The
interest rates are atrocious!
Payday loans range in size from $100 to $1,000. The
average loan term is about two weeks. Loans cost on
average 470% annual interest (APR). The finance charge
ranges from $15 to $30 to borrow $100. For two-week
loans, these finance charges result in interest rates
from 390 to 780% APR. Shorter term loans have even
higher APRs.
Payday loans are extremely expensive compared to other
cash loans. A $300 cash advance on the average credit
card, repaid in one month, would cost $13.99 finance
charge and an annual interest rate of almost 57%.
By comparison, a payday loan costing $17.50 per $100 for
the same $300 would cost $105 if renewed one time or
426% annual interest. (Control+click to follow the
link.)
Payday loan stores have sprouted up on practically every
corner. Some of them are operated by pawn shops and can
be found within the shops themselves, so if you go into
a pawn shop to borrow money, DO NOT let them talk you
into a payday loan instead, even if you can’t get the
cash you want on the item you have brought in for pawn.
For more information, please go to
http://www.paydayloaninfo.org/facts.cfm
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