PROS AND CONS OF GETTING A PAWN SHOP LOAN

Update September 21, 2011  I know that pawn shops have a seedy reputation.  On TV there are programs where the down-and-out will try to get a few bucks for their dentures, or for some old tools after someone has been laid off from a construction job.  You probably think of pawn shops are a place to sell a wedding ring from a failed marriage and you probably think of pawn shops as places filled with guitars and drum sets from rock stars who never were.

But there are also classy pawn shops and respectable families can use these for emergency short term loans.  I know this very well -- because when I was growing up I knew good people who went to high-end pawnshops to get emergency loans on diamond jewelry and sets of sterling silver flatware.  Today's pawn shops offer loans on cars, fine art, and fine collectibles.

There are some advantages for pawn shop loans.  First, they are very fast.  There is no application process, there is no credit check, there is no background check -- all you do is present the property (collateral) and agree to a loan amount and payment terms.  Payment terms including interest rates are governed by law and there is no hiding the fact that they are expensive.  This is why pawn shop loans should be considered as emergency, short term loans.

Pawn shops don't care if you are behind in your credit card or mortgage payments.  As long as your collateral (jewelry, watches, silverware) is worth more than the loan amount you will get your loan.

If you do not repay your loan and redeem your property it will be sold so the pawn shop can recover the money it lent to you.  So you must acknowledge the fact that the loan must be repaid.  If you don't think you will be able to repay the loan you might be better off selling the item upfront instead of pawning it.

You should check the reputation of the pawn shop before handing over the property.  Find out if they are licensed and insured, and how your property will be stored for safekeeping.  Be especially sure that you know the terms of your loan, when the payment is due, and how to make the payment.  And look around the pawn shop before you agree to the loan -- and ask yourself if you want to do business with this company?  You also might want to "shop around" for special interest rates and loan deals among other pawn shops.  The pawn shop business is competitive and for larger loans interest rates and terms are negotiable.

AT THE WORLD HARVEST FOOD BANK THERE ARE NO QUESTIONS ASKED

Update July 7, 2011  I was very impressed by the World Harvest Food Bank in downtown Los Angeles.  They don't ask any questions.  They don't want to know your income level, or if you are a citizen, or how long you've been out of work or even if you have a job but are having trouble with your bills.  They are there to provide wholesome food and all they ask is that you give them a $25 (twenty-five dollars) donation -- or if you can't afford that then just donate four hours of your time.  And what you get for your donation of $25 or four hours is a large shopping cart filled wih fresh foods including fruits and vegetables and staples, plus you get another large box of fresh produce and staples such as cereals, tea, rice, soft drink plus you get another large box with as much fresh fruit or fresh vegetables as you can eat.  Your shopping cart can also be filled with fresh meats, packaged foods, loaves of bread products with the famous brands, even bottled soft drinks and juices.

Most of the food is donated by major food wholesalers and major supermarket chains.  For example, while supermarkets are likely to be selling green and yellow bananas in their stores -- the yellow bananas are donated to the World Harvest Food Bank.

Sometimes the shoppers at the World Harvest Food Bank are driving a Mercedes or sometimes a beat up family car that has gone through three families.  It doesn't matter -- no questions are asked.

The World Harvest Food Bank is at 1014 West Venice Boulevard in downtown Los Angeles, and this is near Figueroa and the Los Angeles Convention Center.  Call them at (213) 746-2227 or go to www.WorldHarvestFoodBank.org for information.   You'll find a very clean and friendly place to shop and you'll be amazed at the amount of quality foods waiting to go home with you.  The World Harvest Food Bank is a non-profit.  Our TV report is below.