Pawn Instead Of A Loan 2

Pawn Instead Of A Loan 2

But are these higher class citizens really feeling the heat in the credit crunch or are they just not sensible with their money?

They are obviously living beyond their means and cannot afford to live their super expensive lifestyle with what they currently earn so they are living in next month's paycheque month in month out.

Some of these big borrowers may start to see their finance issues spiral out of control along with the rest of the country.

Beccy Boden Wilks, from National Debtline, which provides independent financial help, says "It is really worrying that people are using pawnbrokers in order to pay the mortgage or school fees,"

"That means you can't afford your outgoings and need to re-evaluate your finances. There are cheaper ways of borrowing" she says.

In most cases it might be a last ditch solution if they have been refused credit from their banks or lenders and even though some clients may lose their priceless family possession, it is a risk they are willing to take.

The whole process is similar to a payday loan where you can get a lump of cash with no suspicious questions and you will be expected to pay it back in full within a small amount of time.

Payday loans are usually higher in interest than if you are to pawn a possession but then you don't run the risk of losing an invaluable asset.

When you pawn an item for cash the interest rate is usually at 3% as a payday loan usually demands 25%.

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