Payday Loans VS Pawnbrokers

When you’re in a challenging financial position, it can feel as if you have nowhere to turn. You might think that there are no legitimate options available and that no one can help. However, you can approach a payday loans company or pawnbroker. Here are some helpful tips to factor in when you’re researching so that you can make the best choice for you.

What’s The Difference?

First of all, you need to know how payday loans and pawnbrokers differ. They have their differences, and what you choose will depend on what’s more convenient for you.

What’s A Pawnbroker?

A pawnbroker will provide a loan in exchange for a valuable item. Pawnbrokers take almost anything – from jewellery to furniture. These items are used as collateral. Generally, you exchange your item for money, and repay the amount later, with interest, to retrieve it. If you fail to repay the loan, your item is owned by the pawnbroker, and they’ll try to resell it to get a return.

Unfortunately, you can only borrow the same amount as what the pawnbroker can sell the item for. This means that the amount of money you receive is dependent on what someone else would pay to buy it. This option doesn’t work for some, because they might not have anything to use as collateral, or they might not be able to borrow the amount they need with their items.

What’s A Payday Loan?

A payday loan is a more convenient option because you can submit your application online, day or night. As long as you have the right documentation, and if you qualify, it’ll be approved. Many payday loan companies pride themselves on 24/7 service and approve loans on the same day.

When you use this service, you’re expected to repay the loan in full as soon as your next paycheck enters your bank account. That’s why it’s called a payday loan – they’re only meant to be used in an emergency, or when you need extra money to get you through to payday. For this reason, you can only borrow small amounts. You also pay interest on a payday loan.

When you’re in a pinch, you should do your research before making a decision. It might be more convenient for you to get a payday loan; however, you won’t know that unless you know your options. If you find yourself in this situation, apply for a payday loan at Cash Relief in Auckland. Our service is 24/7, with same-day approval and affordable interest rates. Call us today.