Published On: Wed, Dec 16th, 2015

How Car Pawn Loans Work

Car Pawn or Vehicle Pawn loans may seem controversial but in fact they share many similarities with bank loans. There are pros and cons to both and I will try explain how they work below. For more information on how these work visit CarPawnLoan.co.za for a complete rundown.

The major difference between a car pawn loan and a bank loan is the repayment term and interest rate on the loan. These are often times higher than what a bank would offer and the repayment term is typically 30-60 days, although longer periods can be negotiated with a reputable lender. The interest rate on these loans varies from 10-30% depending on the loan company, so do your homework.

One big positive with a car pawn loan over a bank loan is that there are no background or credit checks. Taking a car pawn loan and even defaulting on one does not affect your credit score too.

So how does it work? Do a quick Google search for a reputable lender in your area and then take your car to them for an assessment. You will be required to leave your car title with the lender as surety on the loan. The lender will assess your car’s value based on current market value and provide you with a cash loan within 20-30 minutes. You will need to sign the repayment agreement of course but it is a largely effortless process, unlike acquiring a bank loan.

Car Pawn Loans have become increasing popular in hard times or when cash is needed urgently but as with any loan agreement, be sure to meet the repayment deadline or you risk losing your asset.