Getting a payday loan can be a necessity in tough circumstances.
When you’re strapped for cash, it’s easy to jump at the first opportunity to relieve some of the pressure.
Take a moment. Breathe. Making the right decision with a loan can make or break your financial health when repaying your lender.
In fact, a payday loan may not be your only option.
PawnGuru, an online pawning website, allows you to pawn items as collateral as an alternative compared to traditional payday loans. Other apps, like LendUp, offer another alternative to a traditional loan.
So, which one should you go for? For the low-down on PawnGuru vs LendUp, keep reading.
PawnGuru vs LendUp: The Main Difference
Loans like LendUp and pawnshop loans from PawnGuru are both alternatives for those with low credit scores. They also lend out similar amounts.
The main difference between PawnGuru and LendUp are the loans they offer and how they calculate their loan amounts.
Different Loans: Pawnshop vs. Payday
While LendUp offers payday loans, PawnGuru allows users to sell old possessions for quick cash or use their items as collateral for a pawnshop loan.
While interest rates are comparable in both pawnshop loans and payday loans, payday loans prove to be a little riskier. If you default on the loan, the debt may be sent to a debt collector. Eventually, you’ll have to pay the debt in full.
With a pawnshop loan, the item you placed for collateral acts as a buffer. If you can’t pay back your loan, the pawnshop can sell the item to make up for their losses. You won’t owe the pawnshop any money.
But if you pay your loan back, you receive your item back!
While LendUp and PawnGuru offer similar loan amounts, the way they are calculated is different.
LendUp offers a loan amount depending on which LendUp payment plan you choose. PawnGuru, on the other hand, will offer your item to multiple pawnshops in your area. Their offers will determine how much you can receive as a loan.
PawnGuru Saves You Time and Effort
Typically, when securing a pawnshop loan, you have to go to multiple locations to get the highest loan amount. PawnGuru’s unique pawn shop online feature allows you to get offers from multiple pawnshops in your area.
This means you can secure the highest loan amount without wasting a whole day in travel.
The Verdict: PawnGuru vs LendUp
While both PawnGuru and LendUp provide loans for users with low credit scores, PawnGuru presents a less risky option.
If your income is less stable, you might consider PawnGuru over LendUp. If you default on your loan, the pawnshop can sell your collateral item. This is different from traditional loans where unpaid debts are sent to debt collectors.
PawnGuru also offers you the option to sell your valuables for quick cash as an alternative.
When looking at PawnGuru vs LendUp, the verdict is this: it depends on your unique situation.