There are a number of things people should think about before opting for a collateral loan, but is frustrating because people still don’t follow the basics. Result: They keep crying on the decision they had made.
There is an old saying, Prevention is better than cure.
I’d like to modify it a bit for our subject as, Thinking properly is better than crying at the end.
Firstly, we opt for a collateral loan when there is an almost emergency and we need quick cash. At the same time, we do not want to sell our favorite items, so we think pawning the item is a great option.
Control your feelings and don’t let the pawnbrokers know about the extent of your emergency. It is quite strange how people start discussing their core personal problems with a stranger (pawnbroker). Whatever it may be, a pawnbroker is there to discuss with you the details about the pawned items, and not really for the personal stuffs. With such details, you give them an upper hand and allow them to exploit you to the core.
Photo courtesy of: miran
So, for the start. Have a strong mind, and don’t breakdown when pawning an item.
Moreover, here are a few tips, which can help you get the best out of a collateral loan, making it a win-win situation for yourself and your loved ones.
This has been stressed by a number of bloggers, and I would like to stress on it, yet again. If you need $1,000, you need $1,000 only! Even if the broker tells you that you are eligible for $5,000, you still need $1,000 only. Don’t be under a notion that they are giving you an option because you are a good human. No! The bigger the loan amount, the more they can read out of you in terms of interest. Not that every broker follows this practice, but some do. Whatever it may be, ask for what you want, and not what thy can offer against the item.
With a poor credit score, an unsecured loan can be out of option. In case of collateral loans, the brokers are not interested in your credit rating. All they look into are your pawned items and the identification documents. This is more on the good side, than bad.
- Repayment of Loan: If you are taking a loan, you have created a liability for yourself. A liability is to be repaid. In case of a collateral loan, if you do not repay the loan amount, you lose the item. However, you can be assured that there will be no repeated phone calls or collection agents coming to your house and telling you to make the loan repayment. So, you need not worry about the unnecessary thoughts. Just focus on repaying the loan, which is easier with a clear and relaxed mind.
- Terms of the Contract: Whenever you enter into a contract, it is important that you read the terms and conditions properly. Specially look for the small prints and read them carefully because the most important points are noted in the smallest possible fonts. Also, ask them for other points such as any additional charges, grace period, modes of payments and any other question that pops in your mind. Once again, Thinking properly is better than crying at the end.
With the noted four points, one can conclude that even when there is an emergency, you should be calm and think. If you get nervous, you will surely make some or the other mistake and end up either paying more or getting a lesser amount against the pawned item.
About the Author:
Jasmine Bilimoria is a research writer and a contributor with Best Collateral. Best Collateral is an upscale collateral lender(pawn shop), specializing in large pawn loan against gold, jewelry, diamonds, watches, fine art and entertainment memorabilia. Best Collateral also provides collateral loan in San Francisco and also buys and sells merchandise and precious collectibles.