Are you in need of some quick cash? Pawnshops offer collateral-based loans. This means that your loan is secured by something of value that you own. If the pawnbroker is interested in what you bring in, he then gives you a loan. There are no delays in disbursement. The loan is usually a percentage of the value of the item. Pawnshops keep your item until the loan is repaid.
There are several things to be aware of before using a pawnshop as your money lender. These include:
- Pawnshops are legal entities that are regulated by the State. You may have come across negative stories about them, but they are well-run businesses out to make a profit, just like all others.
- Do your research to determine which are the best pawnshops to visit based on factors such as whether they are being run legally, level of customer care, location, how they do valuation of the items you bring in, loan conditionality, and any other factor that may be of importance to you.
- You need to know the actual value of your item. This will help you to determine which pawnshops to visit and to negotiate the best terms for your loan. These shops typically lend small amounts to their customers.
- Be aware of the difference between selling and pawning. Pawning means that you get a loan with interest, in exchange for your item. You can come back for it later when the loan is repaid. Selling means that you are letting go of the item in exchange for some money. After the sale, you no longer have any rights over the item as it does not belong to you anymore. Brokers are more enthusiastic about you pawning than selling your items as this brings them more profits.
- You must receive a receipt/ticket for your pawned item. This stipulates the terms and conditions of the transaction and will come in handy in case of a dispute.
- Although the initial interest rates may seem low, if you default in loan repayment, there are heavy fees and penalties to be paid. If not dealt with carefully, you can find yourself in a never-ending cycle of debt with the pawnbroker.
- You should be willing to walk away if the terms for the loan are not favorable. You should not be coerced into accepting money on someone else’s terms.
- When visiting pawnshops for a loan, increase your chances of success by offering valuable items that are in good condition, are easy to store and are also valued by potential customers.
- Be prepared for red tape as the broker confirms from reliable sources that you are indeed the owner of the item being pawned. This will usually be done for very high-value items such as diamonds, cars and gemstones.
For years, pawn loans have been a safety net for families that need sudden funds to take care of emergencies and other needs. These small loans are not provided by larger financial institutions www. pawn shop near me
Borrowing money through pawnshops does not affect your credit rating negatively as the loan is secured with collateral, which once forfeited, is considered paid in full. Pawn loans do not require a credit check, bank account or somebody to co-sign as guarantor.
Never pawn anything that you are not ready to live without.