There’s a lot of people out there that don’t really understand how pawn shops work or what it is that they do exactly and that’s fine, but let’s try to answer some of the basics so that you know what pawn shops do.
The major function of a pawn shop is to make what are known as ‘Pawn Loans.’ These are cash loans made against some kind of valuable item that you bring into the pawn shop.
The pawn shop will look at what it is that you have and determine what the used selling value of that item might be if they were put into a position of having to sell it.
They will then offer you a cash loan at roughly 40-60% of the used, second hand sales value of whatever the items were that you brought in.
That cash loan will be given to you and is expected to be paid back within a certain period of time and in addition to a certain percentage of interest as well.
The interest rates can vary state-by-state and are almost always regulated by the laws of the State that the pawn shop operates in.
In addition, the amount of time that you are given to redeem the loan is also based on the state laws of whatever state that the pawn shop operates in and varies state-to-state.
Can Anyone Get Cash Loans
In virtually all states, you have to be at least 18 years old to make a loan or do business with a pawn shop.
In addition, you have to have some form of state or photo id in most states, in addition to any other requirements that those state laws have put forward. For instance, in some states, you must also give a fingerprint to the pawn shop when conducting a transaction.
Lastly, in order to make a cash loan with a pawn shop, you will need to have something of value that the pawn shop is willing to accept and work with you on in order to get that loan.
Unfortunately, if you do not have an item that the pawn shop typically accepts, you will not likely be able to get that cash loan.
Are They A Good Deal
The cash loan that pawn shops make to their customers are typically at low interest rates and the payback time is very reasonable.
In addition, in most states you can extend or repot the loan to give yourself more time to pawn that loan back and therefore get your items back from the pawn shop without them selling them.
Because of the flexibility and general affordability of pawn loan, they are typically a good deal for consumers.
That having been said, there are some states that allow for higher interest rates to be charged by pawn shops. You should make yourself aware of what your pawn shop charges in interest before making any final decision on whether or not to go ahead and make a loan with them.
Are They Safe
The type of loan that you make with a pawn shop is based on the merchandise that you bring into their stores.
They don’t check or credit or bank account. They also don’t report you to credit agencies should you have roof forfeit the loan as they will just turn around and resell your items to recover their money.
Pawn shops are typically one of the safest methods you can use to get the cash you need to cover an emergency expense or unexpected bill that arose out of nowhere.
Should You Make A Loan With A Pawn Shop
Typically speaking, if you are in need of emergency cash to get yourself through a rough period, there are a couple options that you have in front of you.
However, when it comes right down to it, in most cases getting a cash loan through a pawn shop is one of the safest routes that you can go.
In addition, if you think that you will have the money to pay the loan back, than that is even a better situation as it means that you aren’t out anything for having to make that quick, temporary loan.
Overall, you’ve got to go with the best option to fit your circumstances but making a loan through a pawn shop will definitely be a tool you can use to help you through just about any period of time no matter what else is going on.
WordPress junkie, music lover, and consumer of all things pizza-oriented. I’ve run pawn shops and check cashing operations for years. I developed the most successful digital marketing marketing strategy for pawn shops known to date, and flip items on eBay for fun.