Most of us will apply for finance at some stage in our lives. Often it’s the only option when you want to make a big purchase, such as buying a house, a car, or paying for a wedding. Borrowing money for large purchases isn’t the only time we’ll opt for finance though. You might want a credit card or a Personal Loan to make smaller purchases or to pay for unexpected bills.
The tricky thing with finance, is getting approved for a loan. There can be a lot of hoops to jump through during the process and approval certainly isn’t guaranteed.
To apply for a Personal Loan, you’ll need to be able to prove that you earn enough money to be able to repay the loan after your commitments and living expenses have been evaluated. With most Personal Loans, regardless of the lender, there will also be credit checks to determine whether lending to you poses a risk or not.
However, if you have no history of repaying a credit card or a previous loan, or your credit score is not perfect, then you may need to consider other lending options, which we will discuss below.
What Are Your Options If You Have a Bad Credit Rating?
More often than not, banks are unlikely to approve finance if your credit score is poor or even if you have no credit history.
If you have a bad credit rating you still have options. A Pawn Loan is a particular type of loan through a private lender that does not require credit or employment checks. This is because it’s a secured loan and therefore the lending criteria is not as strict. It is actually considered one of the easiest loans for approvals in Australia.
What Is a Pawn Loan?
Pawn Loans are fast and easy approval loans, where you can get the money you need instantly. With a Pawn Loan, you leave an item of value with the lender, which is then returned to you once you repay the loan amount in full.
Because a Pawn Loan is a secured loan, the lending criteria is not stringent at all. If you renege on the loan, the lender has possession of your item and can then sell it to recoup their funds. For this reason, credit checks are not necessary, so if your credit score is below average, you won’t have anything to worry about with a Pawn Loan.
Another thing worth pointing out with Pawn Loans is there are no employment checks, meaning you can be currently unemployed, self-employed or receiving Centrelink payments. Obviously, to ensure you don’t lose your item, it’s a good idea to have a firm repayment plan for how you’ll pay back the debt.
Paperwork for Pawn Loans is minimal, and if you apply early enough in the day, you’ll receive the money you need that same day.
What Can I Pawn For Cash?
Private lenders offer Pawn Loans against the following items:
- Valuables, such as jewellery and expensive watches
- And more…
How Much Can I Borrow with a Pawn Loan?
Let’s say you want to borrow money against your car. The lender will do a valuation to determine the current market value of your vehicle and then offer you a loan of up to 60% of that market value. For example, if your car is worth $40,000, you will be offered a Pawn Loan of up to $24,000 in cash instantly.
Of course, you don’t have to borrow the full amount – just what you need. The less you borrow, the easier it will be to repay. Keep in mind that Pawn Loans are usually short-term loans, so generally the maximum loan term is about 3 months.
As you can see, even with a poor credit score, if you’re unemployed, self-employed or have no credit history, it’s still possible to obtain finance through a Pawn Loan.