For Moments When You Need Financial Relief
As technology evolves, the dialogue about the merits of physical currency continues to become more prevalent. In the day of electronic transfers and direct deposit, is cash on hand even necessary? Those who are in favor of moving away from using currency cite the convenience and speed at which payments can be facilitated as reasons to switch to solely electronic payments. Those in favor of keeping a physical currency fear lower income individuals without the appropriate electronic devices or bank accounts would be negatively affected by any change to the system. Either way, there are plenty of reasons to still carry cash.
If you need to pay a bill at the last minute or on the weekend and miss the bank transfer cutoff time, you could be out of luck. Furthermore, if there ever was a widespread emergency situation, you would certainly want to have some tangible currency. Finally, there are still certain vendors, utility companies and government services that do not accept electronic or credit payments. When people needed financial relief in the past, they had to choose between pawn shops, brick-and-mortar retail stores or banks.
The history of pawnbroking goes back to the Ancient Greek and Roman Empires. In fact, money lending is one of the oldest professions in the world according to historians. Consistent with modern standards, there were short-term lending detractors, namely the Roman Catholic Church that decried charging interest on loans. More recently, pawnbrokers typically offer secured lending agreements backed by personal property items such as jewelry acting as collateral. This industry was highly unregulated for the better part of the last century, with pawnbrokers often setting interest rates. The amount of money offered was determined by the perceived resale value of the items used as collateral. If the customer couldn't repay the balance, the issuer would sell the collateral to make up for the loss.
The Brick-and-Mortar Store
Cash loan stores rose to prominence sometime in the nineties as an alternative. Instead of using personal items as collateral, these stores promoted borrowing services without collateral, otherwise known as unsecured lending service. To get advanced funding, the customer would write a check made out to the store containing the requested amount plus any applicable interest charges or fees. The customer was able to walk out of the store with funds on hand and the check could be cashed on a predetermined day (typically the following payday). The advantage of visiting a physical storefront is the consumer would not have to go through the hassle of determining the value of the required collateral with the issuer.
Traditional banks have been in the lending business since the beginning. Historically, most bank services have been secured, or backed with collateral. Unlike pawn shops, required collateral would usually be something like the deed to one's house. These secured loans came with lending amount limits, based on the creditworthiness of the applicant. Bank services would usually take some time to be delivered, which posed problems to customers who needed money in a hurry. More recently, some banks have begun offering unsecured products to compete with retail check cashing stores and online providers.
You Have Options
Today, consumers have the choice between physical stores, pawnbrokers, certain banking institutions and online lenders as a way of getting expedited services. Pawn shops are often the choice of lower income customers because they do not require applicants to be employed. As long as the customer has sufficient collateral, qualifying can be extremely easy. Middle to higher income customers often gravitate towards retail locations, banks and online short-term lending sites because there is a higher chance they receive a steady income which acts as collateral. Similarly, when it comes to the form of the advance, a lot depends on the income level. Lower income customers are more likely to take physical currency in a borrowing situation. Since middle to higher income consumers are more likely to have checking and savings accounts, they might opt for the approved funds to be deposited electronically or take a check. So the question remains, what is the best way to get the relief you need when you really need it?
Instant Currency vs Direct Deposit
Your first option to get relief is from a brick and mortar location. This includes pawn shops, cash loan stores and participating banks. The downside is that many physical stores are located in less than desirable areas of town. If you use a pawn shop, you will have to spend time determining the value of the collateral you will put up to get money. Additionally, there is always the chance you will have to part with the collateral item(s) if you cannot repay the amount owed. Your personal safety is another thing to consider when debating where to get advanced funds. If you choose to get it through a pawnbroker or retail location, you will most likely leave with funds on hand that could potentially be lost or stolen. Furthermore, if you need to rollover what you owe or attempt to extend the repayment date, you will have to budget the time to revisit the store. If you request funds on a semi-regular basis, the travel time and gas money can add up.
Another option for getting money upfront is applying for relief online. This type of borrowinf option rose to popularity as the majority of American households embraced personal computers and the Internet. The entire process could be completed online with minimal faxing requirements and paperwork. This translated into faster processing times. The only potential downside to applicants is that the funds are deposited into specified bank accounts instead of being delivered as money in hand. On the other hand, the vast majority of applicants prefer the electronic option due to the extra security and streamlined qualification process. Also, as soon as the funds are available in your account, you can visit the nearest ATM or bank to withdraw funds immediately.
Repaying the balance is easier as it can be completed online without having to visit the lender for a second time if you need to rollover the funds. As you can see, you have choices when it comes to getting the relief you need. Simply weigh the pros and cons to determine which option suits you best. If you need money in your pocket immediately, you should consider visiting a cash loan store. If you value speed, convenience and privacy, you might be better served by online borrowing services.