After watching Detroit declare bankruptcy, it’s no surprise that many people in that city are going through tough economic times. Some city workers have been laid off and are relying on their savings and unemployment benefits to see them through. If they incur an expense that isn’t in their daily budget, they will have to find another way to pay for it. They may have tried a payday loan with a disastrous outcome. As a result of that experience, they never want to do that again. Families with no home equity and maxed out credit cards often turn to Pawn Shops in Detroit for help.
Unlike a payday loan, the amount of a pawn shop loan isn’t tied to their income. So even unemployed people can qualify for a large loan if they have the collateral. A pawn shop employee will appraise an item as soon as the customer walks in the door. They will then tell them how much money they can borrow. In addition to pawning an item, the borrower will also have to pay interest.
While the loan is considered high by some standards, it is lower than the late fee charged by many banks on their credit cards. When a person uses a pawn shop loan to pay a credit card on time, it keeps that card’s interest rate lower and protects the person’s credit rating. A pawn shop loan is not reported to a credit bureau. If a borrower fails to repay a loan, that doesn’t get report as well. So using a pawn shop is a fast and confidential way to borrow money. If a borrower fails to repay the loan, there is never any harassing phone calls. The pawn shop owner just takes the collateral and sells it.
Pawn shops in Detroit have limited storage space so they prefer items that are small and easily stored. They also prefer items that hold their value. That gives the pawn shop a longer period to find a buyer. Gold, silver and platinum items are always good items to pawn. In addition to jewelry, candle sticks and tea sets are good items to pawn.
