What You Need to Know Before Taking a Loan at a Pawn Shop

What You Need to Know Before Taking a Loan at a Pawn Shop

A lot of millennials could use some quick extra cash every now and then. Rather than borrowing money from the bank, getting a loan at a pawn shop is becoming more and more popular among young people.

In 2016 alone, more than 40 percent of all millennials revealed turning to a pawn shop at some point in their life. Yes, you read that right. 40. Percent. 

The question then is: What are the most important things you need to know before applying for a loan at one of these organizations?

How to Apply for a Loan at a Pawn Shop in NYC

The concept of a pawn shop is simple. When you decide to take a loan at a pawn shop, you have to bring a collateral item to secure your loan – usually in the form of gold or diamonds. Once the value of your collateral is estimated, you walk out of the door with some extra cash to cover your living expenses.

Unfortunately, taking out a loan at a pawnshop comes at a price. Most for-profit lending organizations in New York City charge interest rates up to 48%. In addition, you are required to have a good credit score in order to take out a loan at one of the lending organizations.

Provident Loan Society: A Non-Profit Lending Organization in NYC

If you’re in need of quick extra cash, but you don’t want to end up paying crazy fees at a later point, your best option is to turn to Provident Loan Society. Provident Loan Society is the only not-for-profit lending organization in New York. Provident Loan opened its doors in 1894 as a response to the many so-called ‘loan sharks’: for-profit pawn shops that were profiting off people in need of quick cash. As a not-for-profit organization, the annual interest rate of a loan at Provident Loan Society will be around 26 percent: typically half of the rate of a loan at a traditional pawn shop. Unlike most other organizations, there are no installment fees and all fees will be disclosed to you before taking a loan.

Provident Loan accepts collateral in the form of gold and diamond jewelry, fine watches and gold coins. You also don’t have to worry about your credit score when you are thinking of getting some extra at the lending organization: anyone can take a loan at Provident Loan Society, regardless of credit score. You can borrow up to $100,000 and there are no required payments until up to six months. Even if after six months you’re struggling to pay back your loan, Provident Loan will try its best to help you via a so-called grace period.

Provident Loan Society has offices in Manhattan, Queens, Brooklyn and The Bronx.

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