Filling the Gap
The Consumer Federation of America found that more than 50% of Americans are living paycheck-to-paycheck. When it comes to financial alternatives, pawn customers do not have many safe, convenient, regulated choices.
|
Short Term Credit Alternatives |
| Type of Credit |
Fee |
| $75 pawn loan @ 25% (30 days) |
$18 |
| Bank NSF fee |
$28 |
| Merchant NSF fee |
$25 |
| Credit Card late fee |
$29 |
| Credit Card over-the-limit
fee |
$35 |
| Utility bill late fee |
$25 |
| Utility bill reconnect fee |
$28 |
| Mortgage Company, average
late fee |
$53 |
To provide their service, all lenders must charge rates commensurate with the size and duration of the loan, collateral, risk and recourse. Pawnbrokers offer non-recourse loans, looking only to the item being pledged to recover their investment if the borrower chooses not to repay the loan. Pawn transactions are small-dollar, short-term loans with no hidden charges. A short term cash need can be met with no credit check or legal consequences if the loan is not repaid. Pawn loans do not cause people to overextend their credit or go into bankruptcy. Pawnbrokers offer the consumer a quick, convenient and confidential way to borrow money. In short, the pawn loan is often the cheapest, easiest way to fill the gap … when the consumer comes up $50-100 short.
