Pawnshops, Quick Loans Gaining Popularity

Richard Erdman has more people wanting to sell him their televisions, jewelry and even their family heirlooms.

"You feel bad when it holds a sentimental value to them," The Coin Shop pawnbroker said. "There are some people that are really hurting out there."

Pawnshops, payday loans businesses and quick cash loans companies are getting more popular during this economic recession, especially during the holidays, said Rod Benstead, director of Consumer Credit Counseling Services. People sell their belongings or take out loans for cash to pay bills, buy Christmas presents or go on holiday trips to visit family.

It's a quick fix to make ends meet for people who are unemployed or struggling financially. The loan agencies are appropriate if used responsibly, but people should be smart borrowers, Benstead said.

People often get in trouble if they don't pay back their loans quickly or if they take out multiple loans, he said.

"I would caution people to think about it very carefully," Benstead said. "They have to be aware of the terms of the loan, and that's just good common consumer knowledge."

Lindsey Cagley, office manager at Check into Cash, said several people collecting unemployment checks have come in for payday loans.

"The economy is bad right now," she said. "I know how hard it is to make ends meet."

The loans allow people to borrow money for a fee and interest, she said. Borrowers pay back loans when they get their paycheck. People find that quick loans are their only option during tough times, she said. Many borrowers need cash for necessities such as energy bills or car repairs.

"We're basically here to help people when they need it," Cagley said. "If there is a bill that has to be paid, by all means, come in and see us."

The economy is bleak, he said, and it will get worse before it gets better. But he'll keep buying people's stuff if they need cash.

Source: gazettextra.com