When you have bad credit, it is difficult to obtain financing from a traditional lender such as a bank or credit union.  One alternative is a pawn shop, but not every community has a pawnbroker.  They are most common in large cities and near tourist areas and casinos.  If you live in an area where there is no pawnbroker, there is still at least one option available to you.  An online pawnbroker can provide you with a loan even if you are unemployed and have bad credit.

An online pawn shop operates in much the same way as a regular pawn shop.  The main difference is that you must ship your collateral to the pawnbroker.  As with any pawn shop, the collateral you use must have some value.  Items that are typically used as collateral include watches, jewelry, artwork, electronic items, and musical instruments.  When requesting a loan from an online pawn shop, you can usually request a courier pack, which allows you to ship your collateral item to the pawnbroker without paying any shipping charges.

Once the pawnbroker receives your collateral, you will be told how much money you can borrow.  The amount is usually around 30% to 50% of the item’s value.  If you accept the loan, you will normally receive the money by bank transfer on the same day.  Sometimes the money may not show up in your account until the following business day, depending on what time the transfer is made.

Make sure you read the terms of the loan agreement before accepting the loan so that you are aware of the fees, due date, and other terms.  Most pawn shops will allow you to pay off the loan early, but the fees and interest will not be reduced if you do.  The pawnbroker will keep your collateral until you have paid off the loan, including the fees.

Fees can vary considerably among different online pawn shops, so be sure to shop around before you decide which company to use for your loan.  Also do a little research to make sure that the online pawn shop you are dealing with is reputable before you enter into any agreement.  You can check with the Better Business Bureau’s website to see if there are any complaints against the company and whether they were handled to the customers’ satisfaction.

After entering into an agreement with an online pawn shop, you should receive a receipt that tells you how to redeem your collateral.  If you don’t pay the loan off according to the terms of your agreement, your collateral will be sold to cover the loan.  Some loan agreements allow you to pay an additional fee to extend the lending period if you are unable to pay the full amount at the end of the original loan term.