Pawnshops and paychecks

Pawnshops were a real boon for people with short term financial difficulties. All they had to do

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was take their watch or other valuable item into a pawnshop. The pawnbroker would give it a value (less than it was worth) and hand over some money. At the end of the specified period, the borrower could redeem the object by handing over some cash. Now the pawnshop concept has had a new lease on life. In the 21st century it's not objects but paycheques that are pawned. This is the era of the payday loan.

What Is A Payday Loan?

A payday loan is a loan that you get against ( life assurance ) expected earnings. It is a short term unsecured loan for a relatively small amount. Lenders lend sums of up to £800, then borrowers repay this in two weeks or a month. The amount borrowers can get depends on their earnings.

Qualifying for a payday loan is simple, even if you have a bad credit rating. All you need is to be a UK resident, over 18 and with a bank account. You also need to have been working for a few months. To get the loan you will need to show proof of ( remortgages ) identification and proof of earnings. Lenders want to see that your salary is being paid regularly into your bank account.

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